This piece today in the
San Francisco Chronicle deserves comment, as it sets out the tension being felt between the Web 2.0 Utopians and the Web 2.0 "its just another business" set. To quote:
Dubbed Digital Utopians by some, and Web 2.0 innovators by others, this latest wave of tech gurus champion community over commerce, sharing ideas over sharing profits. By using Web sites that stress group thinking and sharing, these Internet idealists want to topple the power silos of Hollywood, Washington, Wall Street and even Silicon Valley. And like countless populists throughout history, they hope to disperse power and control....
As opposed to the Quick Buck Brigade, who want to build and sell to the highest bidder...as the Chronicle notes, reality seems to conflict with the ideals:
MySpace, the most popular social networking site, is owned by Rupert Murdoch's News Corp. YouTube, which was built so that people could share their videos with each other, has been bought by Google. And even though Google's motto is "Don't be evil," it is a publicly traded company with a fiduciary duty to make money.
Not to mention Flickr, del.ico.us et al. Question...can "don't do evil" be consistent long term with a fiduciary duty to make money? It would seem not, as Google has changed that strapline to "10 things that we know" or somesuch, one of which is you don't have to be evil to make money. ( Of course, it sure does help though.....)
It would seem that Tim O'Reilly, prophet of all things Web 2.0, is ringing in the changes too. The same article notes him saying that Web 2.0 is "about business" Tech movements start out with similar idealism, only to give way to capitalism. For instance, O'Reilly says, Napster introduced file sharing, but now iTunes has people comfortable with paying for music online.
"You do a barn raising at a particular stage of society," he said, "and then the developers come in. ... It always happens that way."
Mine eyes have seen the glory....and I heard last week that 2nd Life is mutating from an environment of creative virtual architects to a place where the top selling item are expensive branded virtual shoes that you can colour in online. Progress in leaps and bounds !
This all reminded me of something Mark Cuban wrote about early last week about the
GooTube deal. The article is based on a supposed "deep throat" in the industry so its unclear how much credence to give it, but it does obey Patrick's First Law, that the most cynical explanation is usually correct.
Essentially, it implies that the big Media Labels, Google and YouTube have done a stitch up deal that in exchange for stakes in GooTube they will give Google a period of hassle free time to grow YouTube, while they go after its competitors with lawsuits to stunt them.
Another explanation might be that the Labels are going after the small fry to fully test the DMCA laws (the US interpretation of the WIPO rulings) on "safe harbours" to build up a more predictable position for when they do hit GooTube. Of course, these two activities could easily happen in parallel
But the bit I really liked in the above article was the reasoning of the Media Labels vis a vis their most precious assets, their talent base.
The media companies had their typical challenges. Specifically, how to
get money from Youtube without being required to give any to the
talent (musicians and actors)? If monies were received as part of a
license to Youtube then they would contractually obligated to share a
substantial portion of the proceeds with others. For example most
record label contracts call for artists to get 50% of all license
deals. It was decided the media companies would receive an equity
position as an investor in Youtube which Google would buy from them.
This shelters all the up front monies from any royalty demands by
allowing them to classify it as gains from an investment position. A
few savvy agents might complain about receiving nothing and get a
token amount, but most will be unaware of what transpired.
Business as usual - seems like Tim is right on the button then.
And with Frank Quattrone nearly fully rehabilitated, Mary Meeker in full cry, and even
Henry Blodget (now with one t) on the blogside, the players are all lining up for a new game.
So, on the eve of the next annual O'Reilly Web 2.0 Conference (now apparently invitation only rather than the previous open to alls), instead of the seminal 2005 free blogside
article on Web 2.0 you can now buy the
book, at $375.
W(h)ither Web 2.0 Idealism then....where shall we be when Web 2.0 2007 comes around I wonder?
Well, Google is starting to sell ads in
real newspapers, apparently online search ads are possibly getting
too expensive now, and there are increasing whispers that people are turning off their
MySpace et al profiles. Since many Web 2.0 startups are based around flogging advertising to social networks, these should be interesting times.
