I’ve been preparing for a conference this week held by the investment bank DeSilva & Phillips. The concept is intriguing: the principals, Reed Phillips and Roland DeSilva, have invited eight CEOs of mid-market media companies to talk about the transformations in their business to an audience of about 100 members of the private equity and media banking community.

Ironically, the context for transformation is crisis, as the publishing segment of the media sector has been under extreme duress during the recession. While this duress has taken a toll on the capital structure of media companies, it has also forced business to focus, identify where their customers are and develop more flexible and web-centered business practices.

In preparing for my presentation, I’m forced to answer two basic questions: what is attractive about our company, Network Communications, Inc., and what is attractive about our market.

When you are positioned squarely against the housing market it’s easy to fall in to the trap that your market is a problem.

Perhaps the best way to disabuse people of that notion is to show them two charts.

The first looks at home prices since 1970. It is the simplest way of capturing the impact of the housing bubble. For a short period of time,home prices soared irrationally. What we know now is that the loans made against those soaring house prices helped fuel a fever in lending to the entire building market — resale, new homes, multi-family and commercial — that created an unimaginable glut of capacity just when demand was going to decline.

When we take a long view of prices, it is easy to conclude that the market has fallen back close to the norm, and that with a little more correction, the housing market will be where it need to be.

The drama of the price drop over-simplifies the dynamic impact the housing market has on the economy. The best way to measure that impact is to look at the effect of housing on Gross Domestic Product over time.

The second chart captures all components of housing as a percentage of GDP since 1970 and plots the ratio against the logarithmic trend. This analysis shows that housing as a percentage of GDP is significantly below its trend over the past couple of years.

Closer analysis of the number shows that the driver for reduced production in the housing sector is the overhang of excess capacity, coupled with conservatism in the lending markets.

The most volatile component of the housing sector is residential fixed investment, which includes the cost of building new homes and multi-family units, improving existing homes and paying commissions on the sales of homes.

From 1995 to 2005, residential fixed investment increased $319 billion to more than $700 billion.

Between 2005 and 2010, residential fixed investment declined $424 billion.

Historically, residential fixed investment has been about 5% of GDP. Currently it is at 2.7%. At the normalized rate, residential fixed investment would be around $650 billion, or 85% higher than current levels and 15-20% below the peak.

Has anything happened to change the long-term structural dynamics around residential investment? Not really. There are more efficient building techniques, and the overall size of structures is likely to diminish, but the demand for residential fixed investment is driven by the population’s housing need. Population grows, existing housing stock ages, bylining costs come down, and new capital pours in as part of a virtuous cycle.

The current challenge of the housing market is that the alignment between supply and demand still is not set. Demand is suppressed because of the weak employment market and frozen lending channels; supply is too strong because of the overhang of building during the housing boom.

Each quarter the housing market regulates a little bit more, and a recovery in the housing market is not that far away.

At that point, it will be clear that housing is a good market opportunity, with steady growth characteristics that will distinguish it during a particularly challenging decade for our transforming economy.

I was struck the other day by the observation that the start of our current recession was sharper than the Great Depression and that the steps taken by governments around the world to provide financial stimulus helped to moderate the decline.

That observation got me thinking about how different the images of this recession are from the images of the Great Depression.

The New York Times had a long article in the Week in Review section this week that captured some of the underlying difference.

A great many people have lost faith in powerful institutions, from Congress to Goldman Sachs. Yet beneath the bitterness coloring national affairs — down at the level of neighborhood, family, coffee shop, tavern — a tenuous belief in the collective good remains, perhaps moderating national dismay.

I don’t think that the Times article intended to demean the level of suffering and pain that individual people a experiencing during this downturn. But they captured something of the zeitgeist that I experience as a I travel around the country. People are carrying on, often with a tremendous amount of energy and a degree of mobility and connectedness that is unmatched by any time in our history.

That perspective made the chart above particularly powerful.

One dramatic difference is the relatively low cost of food in the U.S. compared to other places in the world. The affordability of food is driven by diverse factors, including vast natural resources of our country, federal subsidy programs, efficiencies in distribution and innovations in preservation.

And compared to other countries, there’s no other place on the planet that has cheaper food than the U.S. (2008 data here). The 5.5% of disposable income that Americans spend on food at home is less than half the amount of income spent by Germans (11.4%), the French (13.6%), the Italians (14.4%), and less than one-third the amount of income spent by consumers in South Africa (20.1%), Mexico (24.1%), and Turkey (24.5%), which is about what Americans spent DURING THE GREAT DEPRESSION, and far below what consumers spend in Kenya (45.9%) and Pakistan (45.6%).

When you don’t worry about where your next meal comes from, you can afford to feel optimistic and energetic. The relatively low cost of food in our country is an important element in keeping that positive viewpoint up

While the buzz about social networking has shifted to the hot new thing, mainstream consumer adoption and usage of social networks is exploding.

eMarketer this week shared some of its conclusions from a recent research report defining the scale and opportunity of the social networking category.

“There is no doubt anymore that social networks, reaching more than 50% of the total US Internet audience, are an essential part of the Internet experience,” said Debra Aho Williamson, eMarketer senior analyst and author of the new report “Social Network Demographics and Usage.”

The research points to broad usage of social network among all demographic categories and continued expansion in the market.   eMarkerter forecasts that two-thirds of Internet users will participate on social networks every month by 2014.  Williamson comments that “the connections and interactions that social networking makes possible didn’t even exist a few short years ago.”

An analysis of the growth in Facebook‘s US users since this past January underscores the robust growth in the social networking category.

iStrategyLabs has been using Facebook’s ad targeting system to track the growth of key demographic cohorts on the service for the past couple of years.  In 2009, for instance, US users of Facebook gained 145% — an incredible explosion.

I was curious just how strong growth was in 2010 and went to the ad targeting system to update the iStrategy figures.

In the first five months of 2010, Facebook’s US users gained 22% to more than 125 million.  The rate of growth is remarkably strong, following the explosion of the past year.

Usage continues to grow more rapidly among adults, with the 25 – 34 cohort increasing 23% over the past five months, and the 35 – 54 cohort increasing 25%.  Interestingly, the number of adults 55+ appeared to decline over the past five months. The net effect of these trends is that the average age of a Facebook user continues to increase.

The service is remarkably mainstream.  And, as the usage data that Facebook shares indicates, remarkably utilized.

Facebook reports as of the end of May that is has more than 400 million worldwide users.

Half of Facebook’s users log in every day.  They interact with 130 friends on average and are connected with 60 pages, groups and events.  Each user is creating more than 2 pieces of content a month:  a photo upload, a status update, a link share, a comment.

This is a truly social phenomenon.

Let’s consider, for a moment, the potential impact for marketers and media brands.

If each user has 130 friends, that means that their first degree of influence is 16,900 friends…the friends of their friends.  Their second degree of influence is 2.2 million friends …the friends of the friends of their friends.

Each time a user interacts with a page, or a group or an event, that interaction is broadcast to her 130 friends.  The interaction can be clicking the “Like” button, or becoming a member, or commenting on an update, or sharing a photo or a post.  If one of the 130 friends then interacts with that page or group, that interaction is broadcast to his 130 friends.  The multiplying effect of interactions with content expand with every Facebook user.  Each of these instances of sharing are a moment where a brand inserts itself, within the context of each users identity, into the awareness of other users.

This is part of the power of marketing on social networks.  The skill is in creating instances of content that people interact with.  Remember, the interaction isn’t just about “engagement.”  Clicking a Like button or sharing a piece of content is just as powerful as leaving a comment.

The Facebook universe is one powerful indicator of the mainstream character of social networking, and the dynamics of user activity underscore how potent this new marketing platform can be for large businesses, small business and media brands.

We’re at the cusp of an amazing cultural shift: the majority of women under 40 within 10 years will be better educated and better paid than men of equal age.

That means that the role of women‘s advocacy organizations in business is not only to strive for equality; it’s to help women prepare for the burdens of leadership.

Stark, but true.

Two recent data points help to support this assertion. The first is the disproportionate number of advanced degrees that women are earning in relation to men. Mark Perry of Carpe Diem shared a chart recently that shows that 139 women in the 25-29 year old group hold an advanced degree for every 100 men in that age group.

Perry also dug into the numbers related to equal pay and found that younger women are earning nearly on parity with men of the same age.

But for single workers who have never been married, the BLS reports that women made 94.2 percent as much money as their male counterparts in 2008. Equal Pay Day would fall on January 22 for these single females, almost three months earlier than the official, unadjusted Equal Pay Day of April 20 for all women. For a separate BLS category of single workers, those with “no children under 18 years old and whose marital status includes never married, divorced, separated and widowed,” women earned 95.6 percent as much as their male counterparts in 2008. Equal Pay Day for that group of single female workers would fall even earlier, on January 19, only a few weeks into the year.

The purpose of these data points isn’t to devalue the generations-long work to give women equal opportunity. It’s to acknowledge that it’s an appropriate time for the focus to shift.

I was struck by this recently when I found myself at a cocktail party hosted by The White House Project the evening before its Epic Awards Gala in New York.

The room was filled with a diverse group of notable and remarkable women, not the least of whom was Marie Wilson, one of the founders of The White House Project. The purpose of the organization is to prepare and present women for positions of leadership; Wilson believes that if women can fill one-third of the leadership positions in government and business, then the national dialogue would shift dramatically…and for the better.

I was at the cocktail party because of my relationship with a notable woman; my wife Tami recently joined to the corporate council of The White House Project. The video below from the Epic Awards gives you a brief feel for what TWHP does.

www.youtube.com/watch?v=HR6IVvDOsAM

As the cocktail party wound down, I spent a little time talking with a very passionate and engaging woman from Texas who is spearheading recognition of the anniversary of the 19th Amendment. She is an executive with a large technology company and spoke about how, just as she is entering the prime of her career, she’s confronted with the decision of whether or not to continue to commit time and energy to an organization that can’t advance women.

I probed around that point: What is it that keeps your company from becoming an attractive place to build a career?

“They don’t know what to do with us,” she said.

Her comment wasn’t colored with bravado, resentment or frustration. She was as puzzled by the organization’s inability to know what to do with a talented, ambitious woman as she believes the organization is puzzled by her.

Over my career, I’ve worked with very successful and effective women, many of whom have had positions of significant responsibility. I’ve witnessed their struggle for recognition and equality. Sometimes I’ve helped and sometimes I’ve hindered. What I have learned over the years is that the greatest reward that an organization can give women is the feeling of flexibility without punishment. I’ve also witnessed how challenging the embedded culture of organizations can be.

As I listened to Marie Wilson talk about The White House Project, I had a new sense of the power that women’s advocacy in business could have, and the benefit of organized and thoughtful dialogue around the questions of women in leadership.

The question is whether business will respond and engage in this dialogue with authenticity and integrity.

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One of my favorite reads is the blog Carpe Diem by the economist Mark Perry. The posts are regular, clear, topical and always advance my understanding complex topics.

Over the past few months, Perry has been sharing observations and links about health care and economic demographics.

Regarding healthcare, he’s communicated his skepticism about the pending legislation by focusing on the market solutions that have developed to provide broad-based affordable health care. One phenomenon he’s looked at closely has been the emergence of stand-alone health clinics.

This weekend, Perry pointed to a loophole in the government plan: for many, the cost of paying a fine will be lower than buying health insurance. What about when you get very ill, you say? Well, the legislation forbids insurers from denying you coverage based on a pre-existing condition, so if you get sick, you’ll just go buy insurance.

In the meantime, Perry points out, you’ll probably go to a stand-alone health clinic to get treated for your occassional illness.

The post is well worth reading, and the comments are even better. Proponents of the health plan rebut Perry’s observation by describing how this loophole can get closed.

At the core of Perry’s observations is the question of whether a comprehensive national solution that attempts to incorporate the embedded biases of existing industries can avoid the emergence of unintended consequences at the local level. His conclusion? It can’t.

The past few weeks, hidden beneath the clamor about healthcare reform (a word I use loosely), there’s been a lot of interesting data and commentary around gender, class, earnings and income.

The highlights: More women are better educated than men, higher earnings accrue to people with more education and less educated people have less job flexibility, higher unemployment and lower lifetime earnings.

These are ultimately more profound realities for our society than healthcare reform. This redistribution of education should ultimately be reflected in a redistribution of roles of responsibility and leadership in our country. Look at Congress, look at executive leadership and today you will see a sea of males, mostly white. That can’t be sustained.

Here’s a look at how the income gap has developed over the past generations.

A timely update of internet statistics, with commentary from Jeremiah Owyang at his blog, here.

JESS3 / The State of The Internet from Jesse Thomas on Vimeo.

The video was designed by the agency Jess3. Their blog is a fun place to spend some time — they do a lot of cool graphics and data visualization work.

Owyang’s commentary is interesting. His conclusion:

While the numbers help us track adoption now, the future of all these numbers is moot. In the long run, social networks as destinations will fade into the background (like air) and we’ll just be able to access or be guided by our friends wherever we are in life at any given time we want.

That’s another stab at describing the post-digital world we’re entering.

Look at this!  I’m more of a Millennial than a Millenial, according to Pew Research.

I think that the big driver of my score was the absence of TV watching and my propensity to use social media and mobile communications devices.

I wish the score meant that you would have to pay more attention to what I think.  But, I know that it doesn’t (even though I’m a Baby Boomer, and probably think that everyone listens to everything I say.)

This is a neat little quiz:  you can take it here.

(Hat tip to Mark Perry of Carpe Diem for pointing to the quiz.)

To understand the future of mobile web usage, the best petrie dish is the Millenials. They’ve got a high level of tech comfort, have a new approach to privacy and transparency — more complex than you think — and are very invested in staying connected with highly fluid social circles.

MediaPost ran a short article yesterday on research from MindShare that is worth a look.

Two highlights:

First, the social sphere of the average college kid is 671 contacts across multiple devices.

How does the average college kid’s social sphere equate to contacts across all digital channels? Exactly 87 email contacts, 146 cell phone contacts, and 438 “friends” on social networks.

And second, the average college kid is moving fluidly across multiple screens.

Also, as unbelievable as it sounds, the study found that college students have an average of 14.3 screens (!) — vastly more than the 5.8 screens that the average adult incorporates into his or her life.

TV, the web and cell phones are the content delivery channels they use. And, in a sign of the future, 92% of college kids have watched a full TV program on the computer in the past year. (This is significant in the context of data that came out from iTunes characterizing TV programs as a small portion of iTune’s entertainment sales. Of course, most college kids are watching the programs for free — they don’t see the need to pay.)

What’s the demographic sweet spot for users of social networks? Not what you think. According to a study released by Pingdom, a web monitoring provider, 25% of users of social networking sites are between 35 and 44, and 57% of the users are older than 35.

This is a mainstream media audience with significant purchasing power and an investment in social tools.

A breakdown of age distribution by leading social network sites is even more instructive. Bebo and MySpace are the youngest sites, each with more than 40% of their users under 24. Facebook is one of the most balanced sites in terms of age distribution. Twitter, Delicious, LinkedIn and Classmates.com skew the oldest.

The older-skewing sites, interestingly, are focused largely on content-sharing or connecting. The design of LinkedIn, for instance, is highly focused on organizing your professional information, but doesn’t give a full-spectrum of communications tools.

The second chart is a little misleading, in that is doesn’t reflect the dominance of Facebook in terms of members and audience.

The data was aggregated using Google Ad Planner.