Economics and Web Geography

[Macrobius]

http://www.readwriteweb.com/archives/google_the_ultimate_money_making_machine.php (Google - The Ultimate Money Making Machine)

How much does physical location matter in Web businesses? How does it affect stock price? Can you make money on the web?



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The difference in scale becomes more obvious when we compare Amazon to Barnes and Noble. Amazon started with just books, but after building the brand it expanded into many other categories - eventually surpassing Barnes and Noble. Amazon's revenue curve has a slope that is far greater than the slope of Barnes and Noble. The key difference: no geographical constraints in the physical sense.
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If geography doesn't matter, immigrants can stay at home and surf, for that Totally American experience, right from the comfort of their huts in Mexico or China!

(But I think the big server companies are already last year's story. What's coming next will break the paradigm. Still, a good read.)

[Frank]

"But I think the big server companies are already last year's story. What's coming next will break the paradigm. Still, a good read."

What's coming next?

[edward gibbon]

http://www.readwriteweb.com/archives/google_the_ultimate_money_making_machine.php (Google - The Ultimate Money Making Machine)
If geography doesn't matter, immigrants can stay at home and surf, for that Totally American experience, right from the comfort of their huts in Mexico or China! Why not? They probably could work from their bed.

[Macrobius]

"But I think the big server companies are already last year's story. What's coming next will break the paradigm. Still, a good read."

What's coming next?

Dunno but I bet it breaks the current paradigm. :)

So much for the I'm sure and can make money on the bet part. On to the guessing part. The big companies are raking in ad bucks because the internet is big and slow. If you don't have a central index of, well pretty much everything, it is really, really hard to find anything. Whatever breaks the logjam and gets you what *you* want faster (say, a better browser that predicts where you surf and pre-indexes sites of the kind you might like by a proxy server -- perhaps even using your search queries to learn your preferred strategies) -- basically, anything that solves most of the half dozen reasons you use a central search engine in the first place, will take down their revenue model. If you could install a plugin and get better, faster results you would. Or lots of people would. And it doesn't have to be 'the new Google'. It suffices to be any better, faster way of doing things. So their revenue model could break under all scenarios, and be replaced by -- nothing. Just some crappy plugin built by a kid, or 5000 competitors sharing data via screen savers. It's not like they are General Motors. You don't need to control coal, rails, steel, transportation grids, power, and the local city council to compete. Better mousetrap 'll do the trick. Lots of mice in the world, and lots of trap builders too -- click -- got me a Google.

Second, big slow targets are tempting. If everyone uses Google, that's where the censors go. If you can't find your illegal MP3s there or your favourite hate site, well you go somewhere else. The more they lock it down, the more they lose. Commodity means schlock and schlock means the early adopters go elsewhere. That means the marketing (you know, whatever pays for server farms of a size to rival the NSA) follows the leaders, since they are richer. Eventually the central networks end up selling drugs to persons who are zoned out or tied down. Like Roller Ball in the 60s -- they cancelled the show when they discovered their average viewer was institutionalized. Mostly homes for the elderly and prisons. You know, the big spender types with lots of leisure.

Google can win with YouTube until they lose a multi-Billion dollar lawsuit (which they might), where upon they say hmmm. That was a whole lot of money we could have kept if we didn't do that. Someone else will then. Just a matter of time before someone figures out how to do it *and* make it not worth going after. Like Steve Jobs and his iPod -- he's getting the record companies to loosen up and getting the business Napster used to have and making it all pay. Google is somebody's Napster.

From there out it gets murkier. I think websites as we know them ('places' indexed by the yellow pages of DNS in a single system, with stuff you mostly find by knowing an exact URL)-- will probably give way to a combination of jury rigged search engine-lets hosted at a number of places, and a searchable mass of indexed information you find at a number of sites. ('Thin Servers' -- universally accessible desktops, web services, news aggregators, blah blah blah) Think, more like RSS feeds floating in a cloud than HTML docs served from one place only. More like the mass of information that was once Usenet than the current Web architecture. There are a couple reasons for this -- censorship is one. If everyone gets 'the news' it is hard to blame anyone for injecting it into the cloud or re-transmitting. Second, indexing the world is not really scalable, esp. after you kill the revenue model. Third, I think DNS fragmentation is inevitable, and not having a single namespace kills the universal part of URL.

Am I right? Who knows. We get to find out though -- 5-10 years we'll know.