As it happened, PointCast, a glorified screensaver that could inadvertently bring your corporate network to its knees, quickly imploded, taking push with it. But just as Web 2.0 is simply Web 1.0 that works, the idea has come around again. Those push concepts have now reappeared as APIs, apps, and the smartphone. And this time we have Apple and the iPhone/iPad juggernaut leading the way, with tens of millions of consumers already voting with their wallets for an app-led experience. This post-Web future now looks a lot more convincing. Indeed, it’s already here.
The Web is, after all, just one of many applications that exist on the Internet, which uses the IP and TCP protocols to move packets around. This architecture — not the specific applications built on top of it — is the revolution. Today the content you see in your browser — largely HTML data delivered via the http protocol on port 80 — accounts for less than a quarter of the traffic on the Internet … and it’s shrinking. The applications that account for more of the Internet’s traffic include peer-to-peer file transfers, email, company VPNs, the machine-to-machine communications of APIs, Skype calls, World of Warcraft and other online games, Xbox Live, iTunes, voice-over-IP phones, iChat, and Netflix movie streaming. Many of the newer Net applications are closed, often proprietary, networks.
And the shift is only accelerating. Within five years, Morgan Stanley projects, the number of users accessing the Net from mobile devices will surpass the number who access it from PCs. Because the screens are smaller, such mobile traffic tends to be driven by specialty software, mostly apps, designed for a single purpose. For the sake of the optimized experience on mobile devices, users forgo the general-purpose browser. They use the Net, but not the Web. Fast beats flexible.
This was all inevitable. It is the cycle of capitalism. The story of industrial revolutions, after all, is a story of battles over control. A technology is invented, it spreads, a thousand flowers bloom, and then someone finds a way to own it, locking out others. It happens every time.
Take railroads. Uniform and open gauge standards helped the industry boom and created an explosion of competitors — in 1920, there were 186 major railroads in the US. But eventually the strongest of them rolled up the others, and today there are just seven — a regulated oligopoly. Or telephones. The invention of the switchboard was another open standard that allowed networks to interconnect. After telephone patents held by AT&T’s parent company expired in 1894, more than 6,000 independent phone companies sprouted up. But by 1939, AT&T controlled nearly all of the US’s long-distance lines and some four-fifths of its telephones. Or electricity. In the early 1900s, after the standardization to alternating current distribution, hundreds of small electric utilities were consolidated into huge holding companies. By the late 1920s, the 16 largest of those commanded more than 75 percent of the electricity generated in the US.
Indeed, there has hardly ever been a fortune created without a monopoly of some sort, or at least an oligopoly. This is the natural path of industrialization: invention, propagation, adoption, control.
Now it’s the Web’s turn to face the pressure for profits and the walled gardens that bring them. Openness is a wonderful thing in the nonmonetary economy of peer production. But eventually our tolerance for the delirious chaos of infinite competition finds its limits. Much as we love freedom and choice, we also love things that just work, reliably and seamlessly. And if we have to pay for what we love, well, that increasingly seems OK. Have you looked at your cell phone or cable bill lately?
As Jonathan L. Zittrain puts it in The Future of the Internet — And How to Stop It, “It is a mistake to think of the Web browser as the apex of the PC’s evolution.” Today the Internet hosts countless closed gardens; in a sense, the Web is an exception, not the rule.
The truth is that the Web has always had two faces. On the one hand, the Internet has meant the breakdown of incumbent businesses and traditional power structures. On the other, it’s been a constant power struggle, with many companies banking their strategy on controlling all or large chunks of the TCP/IP-fueled universe. Netscape tried to own the homepage; Amazon.com tried to dominate retail; Yahoo, the navigation of the Web.
Google was the endpoint of this process: It may represent open systems and leveled architecture, but with superb irony and strategic brilliance it came to almost completely control that openness. It’s difficult to imagine another industry so thoroughly subservient to one player. In the Google model, there is one distributor of movies, which also owns all the theaters. Google, by managing both traffic and sales (advertising), created a condition in which it was impossible for anyone else doing business in the traditional Web to be bigger than or even competitive with Google. It was the imperial master over the world’s most distributed systems. A kind of Rome.
In an analysis that sees the Web, in the description of Interactive Advertising Bureau president Randall Rothenberg, as driven by “a bunch of megalomaniacs who want to own the entirety of the world,” it is perhaps inevitable that some of those megalomaniacs began to see replicating Google’s achievement as their fundamental business challenge. And because Google so dominated the Web, that meant building an alternative to the Web.
Enter Facebook. The site began as a free but closed system. It required not just registration but an acceptable email address (from a university, or later, from any school). Google was forbidden to search through its servers. By the time it opened to the general public in 2006, its clublike, ritualistic, highly regulated foundation was already in place. Its very attraction was that it was a closed system. Indeed, Facebook’s organization of information and relationships became, in a remarkably short period of time, a redoubt from the Web — a simpler, more habit-forming place. The company invited developers to create games and applications specifically for use on Facebook, turning the site into a full-fledged platform. And then, at some critical-mass point, not just in terms of registration numbers but of sheer time spent, of habituation and loyalty, Facebook became a parallel world to the Web, an experience that was vastly different and arguably more fulfilling and compelling and that consumed the time previously spent idly drifting from site to site. Even more to the point, Facebook founder Mark Zuckerberg possessed a clear vision of empire: one in which the developers who built applications on top of the platform that his company owned and controlled would always be subservient to the platform itself. It was, all of a sudden, not just a radical displacement but also an extraordinary concentration of power. The Web of countless entrepreneurs was being overshadowed by the single entrepreneur-mogul-visionary model, a ruthless paragon of everything the Web was not: rigid standards, high design, centralized control.
Striving megalomaniacs like Zuckerberg weren’t the only ones eager to topple Google’s model of the open Web. Content companies, which depend on advertising to fund the creation and promulgation of their wares, appeared to be losing faith in their ability to do so online. The Web was built by engineers, not editors. So nobody paid much attention to the fact that HTML-constructed Web sites — the most advanced form of online media and design — turned out to be a pretty piss-poor advertising medium.
For quite a while this was masked by the growth of the audience share, followed by an ever-growing ad-dollar share, until, about two years ago, things started to slow down. The audience continued to grow at a ferocious rate — about 35 percent of all our media time is now spent on the Web — but ad dollars weren’t keeping pace. Online ads had risen to some 14 percent of consumer advertising spending but had begun to level off. (In contrast, TV — which also accounts for 35 percent of our media time, gets nearly 40 percent of ad dollars.)