It shocks me how many tech writers and self-proclaimed liberals have joined the recent attack on the Free Web.
That’s what Facebook is. That’s what Google is.
They’re the free web.
They don’t charge you for using them. They’re free. Access isn’t free, and neither is most of the information the Web provides. Most of the news today is hidden behind paywalls, available to subscribers only.
But Google and Facebook are free.
The attackers say that on these services “you are the product.” They like to say that because they can afford the cost of subscribing to all the things which interest them.
Google and Facebook have built over $1.3 trillion in market cap, and almost $200 billion per year in annual revenue, with an advertising business model. They won the market and invested their money in building what we today call the cloud. Unlike the phone companies and everyone else, they invested ahead of their growth. Facebook put $1 billion/quarter into its server farms before it had the revenue to back it up. These are risk-takers. They’re what capitalism is all about. They’re Amurica.
Their business model is intrinsic advertising. They collect information on users, and sell ads based on the specific desires of their advertisers. The idea is that an ad that comes to you based on who you are is better, of more service, than one that comes to you based on what you’re reading, which is an extrinsic business model.
It’s bullshit. But Facebook and Google make it up on volume, because ad space on the Internet is unlimited. A car dealer can hit your browser 50 times for the cost of 1 appearance in a newspaper or on TV. This is called reach. Facebook and Google built the free web with reach.
There is nothing wrong with the business model, except for it being wasteful, and not working well for the idiots buying the ads. For users, the result is they’re getting hit with messages they don’t want to see 50 times as much as they were before, and that makes us angry.
An extrinsic business model would not only work better but provide more revenue to writers and other professionals. This is a key business lesson we need to re-learn. But we’re going to have to wait for it. Because today the Free Web is under attack as never before.
The critics think everyone can afford a dozen newspaper subscriptions in order to get a fraction of the riches Facebook and Google give people free. The critics think they should be the gatekeepers telling you what to see, what to think, and how to behave, that the Free Web is a threat.
They’re right. The Free Web is a threat.
There has never been a revolution like the one I’ve witnessed with my own eyes over the last 25 years, since I joined Interactive Age and started covering the Internet full-time, instead of covering technology on the Internet.
The Free Web has brought more wealth and more freedom to more people than any other invention, ever. You could be reading these words in Nairobi, Kenya, or Buenos Aires, Argentina, and you have as much access to the world’s marketplace of ideas, to the world’s markets, as I do.
Because of this medium, the old gatekeepers, phone companies who handed out bits with an eyedropper and taxed them on behalf of dictators, are gone. Dead. They’re off trying to sell cable TV shows you don’t need. Facebook is worth more than AT&T and Verizon combined.
One billion people have been lifted out of extreme poverty in this century. One billion people. They can now get a powerful computer that fits in the palm of their hands. They can access a resource that brings all the world’s knowledge to them, and they can talk back to it.
That’s what the Free Web has built. That’s what the critics are trying to destroy.
Both sections of critics claim high motives. The Right says government should control what people read, hear and say, that freedom is too dangerous to be put in the hands of ordinary people. They want back the power government lost to liberty. The Left insists that the Cloud Czars are abusive, that they’re too big and too rich, and that they’ve destroyed the private gatekeepers who once directed human politics into safe, narrow channels.
I say bullshit to both sides.
I’m not saying Google, Facebook, and the other Cloud Czars are perfect. I’m not saying they’re not self-serving. But this is the revolution. It can be negotiated with, it can be challenged legitimately, and things can be improved. We need law and order on the Internet. We need to go after the hackers, state-controlled mostly, who have made so many lives miserable, often on behalf of governments that would shut off freedom completely, or hand it out with an eye-dropper while blaming the other governments around them for their own peoples’ misery.
I think Google and Facebook should start experimenting with extrinsic advertising models, reducing the present waste, making ads truly serve both sides in the global marketplace. Because people do want to do business with each other. They really do. That’s where wealth comes from, from trade, from exchanges of goods and ideas. Especially ideas.
But it’s time to make this a legitimate, adult discussion instead of charging the Free Web with all the evils in the world, and ignoring what it has brought mankind, what it still can bring mankind. Information does want to be free, even if the people who create information want to be paid.
Ideas by themselves have little value. I know. I’m an idea man. So was my dad. Ideas are only worth money when you can execute on them, or when you have so many spilling out that people will pay to listen to you scream into the wind, when you have entertainment value.
This Free Web has changed the nature of our economy. The era of oil, of resources, of mercantilist business models and feudalist political models, is dead. The gating factor to economic growth today is human capital. Trained, motivated, and (most important) free human minds. The more of these you have, the richer your country. The fewer idiots in your midst who must be paid to go away, the richer your country. And there’s so much wealth being created by technology, so rapidly, that we literally can afford to have idiots go away, sit on their couches, and rot. It’s amazing.
This 4th of July I’m celebrating freedom and the great freedom-giver of my lifetime. I’m celebrating the Free Web and all it has brought and all it can still bring. Long may it reign. And to hell with those who would destroy it for their own purposes, whatever they may be.
