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they are doing what they can to make sure young people are immersed in brand messages

Last year, more than $21 billion was spent in the United States on Internet-related ads. By 2011, online advertising will overtake newspapers as the leading recipient of US marketing dollars.

US media history in the twentieth century illustrated how radio, broadcast television and cable were media with great promise, but once advertising took hold their public interest potential was soon scuttled.

how corporate investments affect the diversity of digital ownership.

Google, Microsoft, and Time Warner are gobbling up leading digital media companies

The two key factors that will determine Facebook's future are the power of network effects and the "stickiness" of its service – ie, the extent to which it can dissuade users from leaving.

he key determinants of success or failure were (i) the average number of friends that users have and (ii) whether the difficulty of using the site comes to outweigh the perceived benefits.

Facebook users will constitute a captive market and will be correspondingly exploited. And the company will be regulated as a monopoly.

How much exploitation will users tolerate before they decide to quit?

n fact, it is now so dominant that millions of people around the world think that Facebook is the internet.

At one point in the conversation, the Google boys noticed that their collaborator had suddenly gone rather quiet.

But the number of commercial companies that are more than a century old is vanishingly small.

in the technology world one can go from zero to hero is a very short time

Google has a well understood and currently profitable business model and a huge technical infrastructure but ultimately is vulnerable to a well-resourced competitor armed with better search technology.

A telephone network with a million subscribers is infinitely more valuable then one with only 10. In technological ecosystems, network effects are very powerful: they explain, for example, how Microsoft came to dominate the market for desktop operating and office systems.

If you put your faith in network effects, therefore, Facebook looks like a good investment because it'll be around for the long term.

"Rather than relying on life experiences, educational travel and face to face interaction with others, children are becoming obsessed with social networking and this is shaping their attitudes instead.

The report concludes that the children with the poorest grades at school are the ones who spent most time on social networking.

Seven in 10 British teachers believe children are becoming more and more obsessed with websites such as Facebook, Twitter and MySpace.

Half of the 500 teachers polled believe this fixation is affecting the children's ability to concentrate in class.

'They enjoy using this tool but there is a danger that these virtual interactions filter out problematic or emotional issues, which in real life, support social and emotional development. ''Social networking has become so much the norm, for adults and children alike, that non-participation can result in feeling excluded or even socially ostracised. ''The time invested in social media versus real life interpersonal interaction can detract from that available for real human contact and contribute to delayed and/or distorted social and emotional development.''

It is also claimed that children who are online at every available opportunity are less willing to communicate with adults.

''Currently there is little empirical research and related guidance on how to integrate social media into school-based learning, although I am aware that many teachers are grappling with this challenge in their day to day practice and some are managing to use this new media very constructively.

Workers in Amazon’s warehouses – or “associates in Amazon’s fulfilment centres” as the company would put it – are divided into four main groups. There are the people on the “receive lines” and the “pack lines”: they either unpack, check and scan every product arriving from around the world, or they pack up customers’ orders at the other end of the process. Another group stows away suppliers’ products somewhere in the warehouse. They put things wherever there’s a free space – in Rugeley, there are inflatable palm trees next to milk frothers and protein powder next to kettles. Only Amazon’s vast computer brain knows where everything is, because the workers use their handheld computers to scan both the item they are stowing away and a barcode on the spot on the shelf where they put it. The last group, the “pickers”, push trolleys around and pick out customers’ orders from the aisles. Amazon’s software calculates the most efficient walking route to collect all the items to fill a trolley, and then simply directs the worker from one shelf space to the next via instructions on the screen of the handheld satnav device. Even with these efficient routes, there’s a lot of walking. One of the new Rugeley “pickers” lost almost half a stone in his first three shifts. “You’re sort of like a robot, but in human form,” said the Amazon manager. “It’s human automation, if you like.” Amazon recently bought a robot company, but says it still expects to keep plenty of humans around because they are so much better at coping with the vast array of differently shaped products the company sells.

The unassuming efficiency of these warehouses is what enables Amazon to put parcels on customers’ doorsteps so quickly, even when it is receiving 35 orders a second. Every warehouse has its own “continuous improvement manager” who uses “kaizen” techniques pioneered by Japanese car company Toyota to improve prod­uctivity. Marc Onetto, the senior vice-president of worldwide operations, told a business school class at the University of Virginia a few years ago: “We use a bunch of Japanese guys, they are not consultants, they are insultants, they are really not nice … They’re samurais, the real last samurais, the guys from the Toyota plants.” In Rugeley, the person with the kaizen job is a friendly, bald man called Matt Pedersen, who has a “black belt” in “Six Sigma”, the Motorola-developed method of operational improvement, most famously embraced by Jack Welch at General Electric. Every day, the managers in Rugeley take a “genba walk”, which roughly means “go to the place” in Japanese, Pedersen says as he accompanies the FT on a tour of the warehouse. “We go to the associates and find out what’s stopping them from performing today, how we can make their day better.” Some people also patrol the warehouse pushing tall little desks on wheels with laptops on them – they are “mobile problem solvers” looking for any hitches that could be slowing down the operation.

. . . What did the people of Rugeley make of all this? For many, it has been a culture shock. “The feedback we’re getting is it’s like being in a slave camp,” said Brian Garner, the dapper chairman of the Lea Hall Miners Welfare Centre and Social Club, still a popular drinking spot. One of the first complaints to spread through the town was that employees were getting blisters from the safety boots some were given to wear, which workers said were either too cheap or the wrong sizes. One former shop-floor manager, who did not want to be named, said he always told new workers to smear their bare feet with Vaseline. “Then put your socks on and your boots on, because I know for a fact these boots are going to rub and cause blisters and sores.” ©Ben RobertsAmazon workers in Rugeley process ordersOthers found the pressure intense. Several former workers said the handheld computers, which look like clunky scientific calculators with handles and big screens, gave them a real-time indication of whether they were running behind or ahead of their target and by how much. Managers could also send text messages to these devices to tell workers to speed up, they said. “People were constantly warned about talking to one another by the management, who were keen to eliminate any form of time-wasting,” one former worker added.

Watson said Amazon was supposed to send the council employment data every six months, but it had not done so. “We had no idea Amazon were going to be as indifferent to these issues as they have been, it’s come as a shock to us how intransigent they are,” he said. Inside the warehouse, Amazon employees wear blue badges and the workers supplied by the agencies wear green badges. In the most basic roles they perform the same tasks as each other for the same pay of £6.20 an hour or so (the minimum adult wage is £6.19), but the Amazon workers also receive a pension and shares. A former agency worker said the prospect of winning a blue badge, “like a carrot, was dangled constantly in front of us by management in return for meeting shift targets”. Amazon’s Darwinian culture comes from the top. Jeff Bezos, its chief executive, told Forbes magazine last year (when it named him “number one CEO in America”): “Our culture is friendly and intense, but if push comes to shove, we’ll settle for intense.”

Ransdtad said it supplied a number of clients with “onsite-flexible workforce solutions”. It added: “The number of workers required by these clients fluctuates in response to supply and demand. When demand for clients’ products or services is high (for example during the Christmas period) the Randstad partnership allows local people to benefit from short-term work on a temporary contract, to help supplement our clients’ permanent workforce and deliver against order requirements.” Certainly, not everyone in Rugeley is upset about Amazon. A group of workers having a pint on a picnic table outside The Colliers pub near the warehouse gates said they liked their jobs, albeit as their managers hovered nervously in the background. One young agency worker said he was earning about £220 a week, compared with the £54 he had been receiving in jobless benefits. He had bought a car and moved out of his mum’s house and into a rented flat with his girlfriend, who he had met at work. “I’m doing pretty well for myself,” he said with a shy grin. “There’s always opportunities to improve yourself there.” Across the table, an older man, wagging two fingers with a cigarette pinched between them, said slowly: “It gives you your pride back, that’s what it gives you. Your pride back.” Many in the town, however, have mixed feelings. They are grateful for the jobs Amazon has created but they are also sad and angry about the quality of them. Timothy Jones, a barrister and parish councillor, summed up the mood. “I very much want them to stay, but equally I would like some of the worst employment practices to end.”

For Watson, the big question is whether these new jobs can support sustainable economic growth. In Rugeley, it is hard not to look back to the coal mine for an example of how one big employer could transform a place. . . . The Lea Hall Colliery opened officially on a soggy Tuesday in July 1960. Miners and their families huddled under marquees to eat their packed lunches and when the first coal was wound to the surface, three bands played an overture specially written for the occasion. It was the first mine planned and sunk by the Coal Board, the body set up after the second world war to run Britain’s newly nationalised coal industry, and the Central Electricity Generating Board was building a coal-fired power station right next door. It was a defiant demonstration of confidence in coal at a time of increasing competition from oil. “King Coal is not yet dead, as many would have it, but is going to be with us for many years to come,” the regional secretary of the National Union of Mineworkers told the crowd.

Soon, miners from all over the country were swarming to the modern new mine. The Coal Board and the local council built housing estates and schools to cope with the exploding population. “Peartree estate was built for the Geordies, the Springfield estate was built for the Scots and the Welsh,” remembered Brian Garner, who helped to build the mine when he was 16. “It was unbelievable, it was buzzing in the town, there was that much money about then. I could leave my job at 10 o’clock in the morning and start at five past 10 on another.” On Friday and Saturday nights, the queue outside the Lea Hall Miners’ Welfare Centre and Social Club would wrap right around the building. Rugeley’s mine was soon the most productive in the country. It was a “young man’s pit” with all the latest machines and techniques, says Ken Edwards, who started there at 25 as an electrician. The work was still dirty and dangerous, though. In 1972, a local reporter took a tour. “All is silent except for the movement of conveyor belts which carry the coal and the murmur of the air pumps. The blackness is relieved only by narrow shafts of light coming from each person’s headlamp,” she wrote. It took her two days to remove the black dust from her nails, ears, nose and hair.

The good times didn’t last. By the time the pit closed, four days before Christmas in 1990, a spokesman for British Coal told Reuters it was losing £300,000 a week. More than 800 people lost jobs that paid the equivalent of between £380 and £900 a week in today’s money. The town council’s chairman tried desperately to say something reassuring. “It has come as such a shock,” he told the local paper. “[But] we have got to do what many have done and look for new areas, particularly information technology and high technology. We have a lot of expertise and a wonderful geographical spot. There’s no reason why it should be the end for Rugeley.” From behind her desk in Vision estate agents, all purple paint and fairy lights, Dawn Goodwin sucks the air in through her teeth at the mention of Amazon. “We all thought it was going to be the making of the town,” she says. She expected an influx of people, including well-to-do managers, looking to buy or rent houses. But she hasn’t had any extra business at all. People are cautious because they don’t know how long their agency jobs with Amazon will last, she says. One of her tenants, a single young woman, got a job there but lost it again after she became ill halfway through a shift. She struggled to pay her rent for three months while she waited for her jobseeker’s benefits to be reinstated. “It’s leaving a bad taste in everyone’s mouths,” Goodwin says with a frown. Even the little “Unit 9” café next to the Amazon warehouse hasn’t had a boost in trade. The women who run it reckon the employees don’t have enough time in their 30-minute break to get through security, come and eat something, and then go back in again.

In a cramped upstairs office at the Citizens Advice Bureau, Gillian Astbury and Angela Jones have turned to statistics to try to identify Amazon’s effect on the area. They haven’t had an increase in the number of people asking about employment problems or unfair dismissal, but nor has there been any improvement in the community’s problems with debt and homelessness. Their best guess is that people haven’t had enough sustained work to make much of a difference. Astbury says employment agencies are a “necessary evil”, but stresses it is hardly ideal for people to be bouncing in and out of temporary work, particularly when a job ends abruptly and they are left with no income at all until their benefits are reinstated. Workers leaving Amazon have had a particular problem with this, prompting the parish council to submit a Freedom of Information request to the Department for Work and Pensions to find out exactly how long local people are being made to wait for their social security payments to come through.

Far from the CAB’s little office in Rugeley, Britain’s economists are also puzzling over why the economy remains moribund even though more and more people are in work. There are still about half a million fewer people working as full-time employees than there were before the 2008 crash, but the number of people in some sort of employment has surpassed the previous peak. Economists think the rise in insecure temporary, self-employed and part-time work, while a testament to the British labour market’s flexibility, helps to explain why economic growth remains elusive. Angi Cooney, who runs C Residential, the biggest estate agent in Rugeley, thinks the nature of employment is changing permanently and people should stop pining for the past. It’s “bloody great” that a company like Amazon chose to come to “this little old place”, she says fiercely, looking as if she’d like to take the town by the shoulders and give it a shake. “People expect a job for life, but the world isn’t like that any more, is it?” Sarah O’Connor is the FT’s economics correspondent