Internet: "propel the Internet forward”

Disclaimer: This is in response to an email that I received from someone in my social/political network. He has articulated several interests and ideas to me recently. This is more or less my response. In the beginning this article is about exploring the production of more content where I antagonize if this is a good idea without a more complete focus or reason. I then go on and open the doors to explore evolution of the web, the indexing of the web, advertising, consumer purchasing, ethics and business decisions. In this articles current state of chaos it is, what I believe to be information rich, but discontinguous and random. It is abstract and ab-scure (obscure) but it is the foundation for some very interesting research. It is my starting place and hopefully will make for some good discussion.

Who will it benefit or what is the outcome desired, understand your consumers and focus. First we need to evaluate if there are good methodologies to access this increase in content. We first need a solid ontology language/technology other then our traditional semantic processing and indexing technologies (Google/LSI) otherwise content will continue to be inaccessible even though it is readily available (statistics about Internet indices below).

Currently the most important issues I feel is to understand outcomes that will benefit people worldwide with little ethical implications – then achieve those outcomes with great passion and focus. Lets get off topic for a bit and read this quote.

“A major reason paying for content doesn’t work very well yet is that it’s not practical to charge small amounts. The cost and hassle of electronic transactions makes it impractical to charge less than a fairly high subscription rate.

But within a year the mechanisms will be in place that allow content providers to charge just a cent or a few cents for information. If you decide to visit a page that costs a nickel, you won’t be writing a check or getting a bill in the mail for a nickel. You’ll just click on what you want, knowing you’ll be charged a nickel on an aggregated basis.

This technology will liberate publishers to charge small amounts of money, in the hope of attracting wide audiences.

Those who succeed will propel the Internet forward as a marketplace of ideas, experiences, and products-a marketplace of content”

(Content is King; Bill Gates, 1996).

What Mr. Gates described to us is Google AdSense and Web 2.0. The advertisements that show up in search results, inline on web pages, YouTube, Flickr, MySpace. It is the monetization of the accessing of content that was described in the aforementioned quote.

The quote stated that we would pay to access information, we do, but indirectly. This cost to us the consumer occurs very indirectly and subtly; I’ll explain why. The advertisers, the companies advertising are paying for advertising which I believe to affect PPI, which effects production costs. I believe consumer goods price inflation is heading upwards everyday; it is because we continue to consume more and more of the same item. It is the aggregate value of a type of good consumed over a lifetime — that is where our new aggregated-product CPI is moving upwards. Consumers buying lots of a type of good (cell phones) has allowed companies the luxury of greater economies of scale. Keeping CPI down, hiding the strain on the consumer and increasing PPI.

I am new to CPI/PPI and understanding Inflation but I am going to do a little more research and work the math out myself so I have a little better grasp. Here is an article that I found that leans toward the belief that something is causing a spread in PPI/CPI.

It is my belief that inflation of cheap consumer goods is real; the strain placed on the consumer is even more real then ever, consumers are very distracted and make decisions without thinking about them. We buy lots of the same item (See Guardian) regularly (a potential explanation here for QOL issues American’s have). Proof of this increase in how much we are purchasing is demonstrated by the increase in advertising dollars being spent. Advertising as a percentage of GDP (currently ~1%) is projected to grow faster then GDP and Google projects that we will see it grow to 3% of GDP (I think I heard this in a recent Google Keynote/PSA) .

What Bill said was ten years ago. In 1962 Quillian said while working on AI (Turing et al.) a grand effort would be to have a semantic interconnected web, this is just now coming to fruition in some elementary way. Google has been so bold as to put a date on when they were have AI.

Lets think about content is king some more. In 1998 Google had only indexed 8% of the Internet and Hotbot around 15%. It was said that it could take up to six months to get your site indexed on the Internet back then — now it takes 6 hours and today Google has indexed ~80%. As we move to a more semantically rich web that is described by a clear, concise ontology language the web will become much more valuable to us as consumers of mass information, syndicate and aggregate! Web 2.0 might be ending, so I wouldn’t bet on hopping on the media bandwagon anytime soon .

So now we have two interesting concepts that I have to somehow relate to bring this entry to a conclusion. The impact of web-based advertising and the production and accessibility content. These are two distinct paths which you can head down with a new idea.

Option 1 | You can produce content to have somebody buy it at a later date, because it is “hopefully” desirable content that can be monetized (Google|YouTube|Fox).

The Google|YouTube|Fox merger is interesting, it is what I like to think of as the billion dollar pass-thru. Fox pays Google to monetize MySpace and then Google buys YouTube with the money from Fox, YouTube videos shows up on MySpace, which Fox owns. Ironically YouTube videos account for 1 of every 3 videos on the web. That is alot of monetization going on. This triad is sucking money out of advertisers and the consumer.

Option 2 | You can generate a new creative method of advertising, which as I discuss earlier is seemingly unethical, but really not a bad business idea and has a promising market outlook with a growth of 2% of the world’s GDP.

Option 3 | You can find a new method for organizing and maintaining content like Wikipedia or Google or Vivisimo has done and probably sell it for a great profit to someone like Google, but trying to monetize this new system is very high risk.

In one of the latest QE reports from Google Eric Schmidt spells it out very clearly, pick option 2, because there is a lot of room and they are looking for good competition. My advice right now is to narrow your focus on accomplishing one of these things and be ethical, know that you are promoting a healthy economic environment for people and business.

I don’t want to say that Google is bad, but I do have to note that they may possibly be the antithesis of “Don’t be evil” when it comes to what is happening with traditional marketing dollars, money that once paid postman, printers, paper companies, shippers, frieght companies, ink companies, copy companies is being pasted between members of our corporatocracy. I admire Google, I use Google and I think what they have done to organize the Internet and make it a fun, and useful experience is amazing, I recommend anybody to use their products and check out Google Labs but they have done this at the cost of the consumer, hopefully it has made everybody’s life a little bit better in a way that justifies the cost to the end user. I suppose that Keynesian ethical arguments apply here, or maybe you like a different ethical school of thought.

Good luck and good reading please leave any comments or questions you might have. Feel free to blow massive holes in my arguments, I need some feedback and I understand that I have lots more to learn!