Alexander van Elsas’s Weblog on new media & technologies and their effect on social behavior

Being able to pass relevant information from one person to another has always been part of the evolution of mankind. When there was no technology we used storytelling. People would listen to the oldest, wisest, craziest people in their community to hear about the past or the future. Families used storytelling to teach children their heritage. Slowly drawings were added to this information passing, possibly starting with the earlies cave drawings. Where storytelling was used for 1 to 1 or 1 to a few connections, the ability to draw lead to more persistent information passing. From symbols we went to pictures and written language. Storytelling remained as an important way of sharing information but we added letters and manuscripts to it. Manuscripts were copied by writing them down again. Each manuscript was unique in its own.

With the introduction of printing technology things changed rapidly. Now books could be copied much quicker and at much lower costs. Again, the storytelling remained, but books and newspapers made the information passing process faster and simpler. The technology developments that lead to the telephone lead to the possibility to share information real-time without the need of being at the same location. Much later, the mobile version was created, allowing communication without a fixed position. These different technologies allowed 1 on 1/few/many information passing.

Computer technology gave us the ability to communicate electronically via chat and e-mail. And with the introduction of Internet technology, the possibility to make information accessible to anyone on the net became a reality. The first version of the Internet was a static library of information. Web pages were added and the most important problem to solve was how to find the right information. Information became clustered in web portals, and finding information using search was invented. The cost of information creation/storage dropped to nearly zero and left us with infinite amounts of information, creating the problem of finding the right information.

Web 2.0 provided us technology to tackle this. Partially by clustering people and information into communities. It also gave us user generated content. Instead of companies or professionals, everyone could now create information, video, audio, pictures, and share it with the whole world. the Internet changed from a static library of information into a dynamic world of opportunities. Everyone can now become a storyteller by simply starting a weblog. The subscription to a magazine or newspaper has now been replaced by RSS subscriptions to weblogs. And to structure this world full of dynamic information we need new ways of finding the relevant stuff.

Search engines work to a certain extend but cannot deal with our urge to have instant access to something created right now. the information flow needs to be real-time. The response of web companies is to provide near real-time tools for information flow. With services like Twitter, Jaiku, Pownce, we get real-time many to many conversations. And for our convenience of finding the right information we now have content aggregators that find all relevant content for us. Often specialized for a specific content type and using a computer algorithm (e.g. TechMeme provides us with the latest in Tech news using a special algorithm). Facebook providing us near real-time access to what our friends are doing. Or Friendfeed, a content aggregator that lets people do the content aggregation. By subscribing to people we know, find interesting or trust, Friendfeed provides you with the content those people like.

But the problem of finding the right information is of all times. Just look back into history (not just my short, inaccurate, and incomplete summary ) and we can see that finding the right stuff is a problem of all times. We now have nearly unlimited computer power and storage capabilities, but that leads to nearly unlimited (and often unclassified) amounts of information too.

So the question becomes, what is next? I can’t look any better into the future than you can, but I have a tendency to look at the past and try to see if human nature can provide us with clues for the future. I believe that we haven’t seen the end of content aggregation or search engine algorithms yet. Simply because the web business model drives us there.

All that content aggregation really does is reposition, reclassify or reorganize content that is already out there on the web. Whether it is done by a computer algorithm in the case of TechMeme, or done by people, in the case of Friendfeed. But you can easily spot a few problems with aggregation. First of all, if content aggregation tries to be complete, all it does is try an attempt to get all the content out there back into one place. The more content it aggregates the more difficult it becomes to find the interesting stuff from the pile. The signal to noise ratio drops to the level of the entire web. We quickly need search algorithms and noise filters to get to the good stuff.

If content is aggregated using people, then we get a “democratic” version of the web. It filters out the stuff that the community likes best, leaving the more obscure or less liked stuff behind us. But I’m no so sure that the stuff that comes up this way is always the best stuff. If anything, democracy principles to select information, also leads to predictable and similar content. There isn’t room for obscurity or weird stuff. The people that are in such communities will end up selecting only part of what is out there, governed by themselves and the social community they are part of.

Web 2.0 technology and business models are aiming at the masses, large communities with millions of members, enormous content aggregators with uncountable amounts of content. But I believe that a large part of the Internet population will end up getting lost in this new digital universe. It is like the Star Trek computer that Captain Picard can talk to. It has all the information, but what if we simply don’t know the right question to ask?

Content aggregation is the new thing now. But the problem we should be solving isn’t the many to many flow of information. It is the one to a few, or few to a few that needs to be tackled. I doubt I’ll ever need to know about all the content that is out there. It is just a small part of it that I’m interested in. Content aggregation, no matter what form is used only leads to more content leading to noise, filtering and search. Social networks allowing us to connect to the entire world leave us with too many connections and too much information. It leads to more than we can handle. It leads to so much information, tagged and targeted, that the information itself becomes less valuable.

And when people get lost, they will simply return to their human nature. They will look out for the oldest, wisest, or craziest people out there. I don’t think the world needs more information. We don’t need any more or better content aggregation, search algorithms or noise filters. We need more inspiration. We need storytellers (and that will be the topic of another post).

What do you think? Where do you get your inspiration from? Are there any storytellers out there we should know about?

In my previous post I spoke about the presentation Charlene Li gave about the future of Social Networks. I ended up analyzing what it would mean for advertisement. But the thought of everything being connected into one big social network, or social graph, remained in the back of my thoughts. I asked myself if this “everything gets connected” thing is something a user wants or something an advertiser needs.  And then this morning I realized what has been bugging me about this. It’s the scale of it.

Imagine the scale of a social network (which may easily be overlaying several different services) that interlinks the entire Internet population. Imagine the scale of the social graph that comes along with it. Try to imagine the enormous amounts of interactions that will take place in such a network. Add the number of user actions to that equation. And then try to think about the data that is being stored and analyzed by those that want to get to us commercially.

The scale of such a network would be almost unthinkably large.  It is like discovering the nearest galaxy with the largest possible telescope, only to realize that there are many new ones behind that.

In my opinion the scale of such a network would create a number of problems. Lets get rid of the technical issues first. We aren’t very good at designing and implementing scalable solutions so there are bound to be technical issues with such a large scale solution. I’ll park that one aside, but will get back to it in a short while.

On the service provider side there will be a competition issue. If we are talking global scale here, not just physical, but also in terms of population, then most service providers may just as well stop trying to become the next hit. There is really only one company even remotely capable of running such an incredible infrastructure and that would be Google. Not just because they have incredible expertise on handling large amounts of data. Not just because their whole identity is based on handling the unthinkable amount of data (hence the name Google). Not just because they dare think and act this large which is thoroughly embedded in their identity. Not just because they are already acting in every possible relevant market ranging from search, social network, e-mail, office apps, location, maps, and mobile. Besides all of that, think about the way Google has been thinking about infrastructure. They own data warehouses all around the world, they invest in fiber, they are by far the largest global infrastructure owner worldwide. There probably isn’t much data traveling around that doesn’t pass over the Google infrastructure. I don’t see anyone else thinking about infrastructure on a scale that Google does?

While this has benefited the general Internet population enormously and set free incredible innovations, it will become a hurdle that will provide us with a lot of trouble. Google will own the single biggest walled garden, spanning the entire Internet. And that can’t be good. Even the enormous scale that both MySpace and Facebook are operating upon shrink to tiny size when comparing that to the infrastructure Google holds and will further develop. If one company will own that much infrastructure and data traveling around it, there will be hardly any competition possible.

Who can take on such a giant? Who can compete against the sheer power of owning almost the entire Internet. Who can scale to such a level that they can even remotely compete on numbers? Already Google has taken more than 75% of the search market. Now people dare think they can move up to 90%. If that is the case, then effectively there will be no more competition out there. And that will be the death of innovation.

On the advertisers side, having one large social graph and all the data to analyze this might sound like the Marketeers wet dream. People would be profiled in unprecedented ways. Any cross-section can be made. You could target any thinkable set of characteristics you want. But there is one thing you can’t target. It’s called human behavior. People might show certain patterns on-line, show certain behavior that profiles them in some way. Might have friends that seem similar through some set of characteristics. But human nature isn’t all about patterns. There is always the wild card of the unexpected. Just because you mightbe able to map me in some chart, doesn’t mean your commercial message will hit me between the eyes. You might know a lot about me, but unless you will provide me with value I won’t be listening to you.

What would happen to the user in such a global scale network. With the transaction cost of finding and interacting with people around the world dropping to zero we will probably all have enormous amounts of on-line friends in our social graph. There would not be a single thing unnoticed on-line. Every step we take is being watched by a Big Brother. We can scream out our message to the entire world only to find out that no one is listening anymore. We could have millions of friends, only to realize we really don’t know any of them anymore. By joining the network consisting of the entire population we will have reached something we thought we got rid of, anonymity. There will still be the influential, and no-influential. The haves and have nots.

At the same time we will find that it is almost impossible to have a life without this network. Most of the needs we have will be supported in this on-line network. Most of our identity has moved on-line. We probably can do anything on-line. Besides some basic stuff we really need to do in the physical world (eat, drink), most of our dealings that are needed to make a living, run our finances, obtain services are moving  on-line. Here comes the danger of reliability I talked about earlier. What if we have a universal identity on-line that we use for all our on-line activities. From social interaction to professional services. What if, due to some technical malfunctioning, our on-line profile wouldn’t be available? We wouldn’t be able to participate or interact in this global network. We wouldn’t exist, even if it was for only a short while. A scary thought really.

Is this really what we want when we talk about the need for openness, for data portability, for lowering the walled gardens? The consequence of it might be that one of them takes it all.  I sure do not want one single company to have that much power and control over the biggest influence of the lives of coming generations.

But there is always hope. It’s called human nature.  If we can learn one thing from history it is that when things go up, they will come down again too (simple matter of gravity I suppose). There isn’t a single empire build in history that was strong enough to last for ever. If the trend is that the entire population will be connected in one super social graph, then there are bound to be people that refuse to join such a future. They will find ways to travel around this network without being seen by the owner of that network. They will find ways to communicate and interact without Big Brother watching them. They won’t feel the need to be always connected. They don’t want to be mapped, to be labeled, to follow a specific predicted pattern. They don’t want to be part of something, but instead be a unique individual. And they will be perfectly happy knowing that at one point people will want only one thing, freedom.

What do you think? Will a scenario like the one above be likely to happen? Or am I overestimating the strength Google has (or underestimating the power of possible competitors)? Will Google hit an Innovators dilemma at one point and overtaken by something new? I’m interested to hear what you think of the possible consequences of a global network that connects us all.

Sometimes when you look at a specific situation or problem it helps to think opposite. When you think opposite or try to do things entirely against existing rules it helps you to understand the system or to find new ways of dealing with it.

I was thinking about that last night while going to bed. I entered this half dreamy state right before you fall asleep and my thoughts were uncontrollably unleashed. A stream of thoughts appeared, related to activities on the web. I remember thinking about Facebook, MySpace, YouTube, all the major websites that drive traffic all the time. I linked it to current on-line  advertisement models and thought about how everyone is locked into this advertisement trap (all of this sounds like a conscious stream of thought, but it wasn’t really ;-)). The portal, the network, the traffic, all of that is important for advertisement revenues. But this catch 22 leads to lock-in of the user instead of freedom. It leads to data hogging, instead of setting your data free. It leads to non-portability instead of the user travelling free around the web globe.

And then it came to me, what if we would turn it all around. What if we would think opposite? I fell asleep with this feeling that was a great thought, although now I’m awake again it is difficult to get that positive feeling back again. But I decided to think it through a little to see where it would take us.

What if customer lock-in was changed to customer freedom? Instead of portals and (social networking) sites trying to lock you in (for advertisement revenues) they would set you free.  Customer lock-in is a term thought up by marketeers. It helps them get a grip on their work, but it is pretty abusive to the one being locked in. Of course, all marketeers are idiots and do not understand customers any ways. Letting go of your customer or user is pretty scary stuff. But locking them in and thinking you really have a meaningful brand experience with them is an illusion that is held up by CPM metrics and other old school advertisement tricks.

Setting your customer free means a different approach and philosophy to web service design. No more big portals that have an urge to drive traffic. No more pulling in the customer and never letting him out again. No more data hogging or big brother is watching you. No more not allowing the customer to take his data away to another service or even burning it to a DVD archive (ever tried exporting your Facebook profile data?). It means the service owner doesn’t own the customer (yet another term thought up by old school marketeers), but provides the customer service. It means that monetising the network isn’t important any more. Instead the service provider needs to monetise customer value. It means the end of endless and annoying registration and profile processes when a user wants to obtain a service. No more profile mapping to advertisement schemes (SocialAds). These are pointless as we all look much better on our on-line profiles than in real-life.

Where does that leave the customer? It provides freedom. Freedom of choice, of movement, of service, of data. It means the customer is back in the driving seat. He or she travels around on-line and decides where to stop end get service.  It makes the customer important again. It means that the major services do not force the customer to come to them, instead, they come to the customer when he wants them to. The network is not important any more, it’s the customer. The Internet evolves around the customer, instead of the customer evolving around a Web service. But freedom comes at a cost (it always does). It leaves responsibility where it belongs, with the customer. The customer is responsible for his actions, his movements, his data, his privacy. It means that the customer might have to pay for a service that provides him value (now there is a weird thought), instead of running of to the nearest free service (that locks him in again). Freedom is great, but a bit scary too.

Where does that leave the service owner? He needs to stop thinking in monetising the network, social graph or user profile. He needs to monetise customer value. Instead of locking the customer in with free services he needs to draw the users attention by providing him value. He needs to compete on customer value services instead of the size of his user profile database and advertisement revenues. Letting go of his customer, and trusting that this customer will return for more because he provides him valuable services. No more social networking, but instead focusing on social interaction. It means sending the customer a bill, instead of sending a bill to the advertiser. It means counting on slow uptake of your service (as it might not be free any more), but getting customers on board that actually pay to obtain value. It means organic and natural growth instead of testosterone based power growth. It means you need to rethink your business model instead of going with the current free a-based model. Look where that got Amazon! It isn’t a bad business model to monetise customer value. It’s aactually the most effective business model there is.

Where does that leave the advertiser? He needs to stop thinking that screaming out his message to a large crowd provides the crowd with value. Providing the customer advertisement while he is interacting with his friends within a social network isn’t the right thing to do. It doesn’t provide the customer value, it’s most likely intruding. Thinking negative attention is better than no attention is a lost strategy. Instead the advertiser needs to think how his message, in itself, can provide the user value. Advertisement can only be effective and valuable when the advertisement itself provides value in the context that it is seen. That is why advertisement is so effective in search. That is why Google makes a fortune out of it leaving all competitors way behind. When a customer is searching for something advertisement makes sense. When he is interacting with someone, leave him alone, you’re only trespassing.

Sounds like a great plan to me. But who am I kidding, I was only half awake when the thought hit me.

The Wall Street Journal just published an article written by  Esther Dyson, called “the Coming Ad Revolution”. It is an interesting article. I think Ms Dyson starts out right when she discusses the current bombardments of ad pressure that ultimately leads to users ignoring ads. She says:

This market will get more competitive, and users will be barraged by ads to which they will pay less and less attention. Call that public space, a world of billboards and cacophony. Even though the ads will be more “relevant” than ever, users will increasingly tune them out.

So far so good. But I don’t agree entirely with the rest of her article. She continues with:

Now consider the new world of social networks. Facebook, unwittingly or on purpose, has been teaching people to manage their own data about themselves. Facebook’s launch of the Beacon service — which informs Facebook of members’ activities (i.e., purchases) on other sites — was a PR fiasco. But it still familiarized millions of users with the notion that they can control information about themselves online — and determine to whom it is visible.

What might seem like a horribly complex and tedious task to their elders — categorizing “friends,” managing news feeds, handling intersecting communities of contacts — feels natural to the Facebook users of today. They want more granularity of control, not less.

I agree partially with Ms Dyson here, people need more granularity of control. I doubt everyone understands that yet. Once people become less naive and begin to understand what Facebook and other social sites do with their profiles, more people will want to control which aspects of their digital lives can be used or not. But she goes on to explain how this behavior will help change the advertisement scene and provides us with a traveling example.

So what’s the business model? I’ll “friend” British Airways, which will say, “We see you’re going to Moscow next month. Why not fly through London and we’ll give you 10,000 extra miles?” I’m no longer in a bucket of frequent travelers, my privacy protected. I’m an individual with specific travel plans, which I intentionally make visible to preferred vendors. British Airways, of course, will pay Dopplr a handsome sponsorship fee to be eligible to be my “friend” (just as a Nike rep might pay to sponsor a basketball game and be part of the community). Someday NetJets may show up, offering to ferry me and my friends to a conference we’ll be attending together.

I’m far more likely to respond to BA or NetJets within a trusted site, and for a specific offer, than I am to heed their ad while reading a newspaper article on the troubles in Russia. (As for Orbitz, my old standby: After five years, it still doesn’t acknowledge my preferred airlines.)

I couldn’t agree more with her that this is a good example of a commercial message adding value to my actions. But there will be a long way ahead to reach this excellent fitting proposal from an airline. It assumes that not only I have taken action to allow British Airways to provide me offerings, but it also assumes that British airways, or any other advertiser for that matter, knows or can infer enough from my on-line behavior that they can provide me with a matching proposal.

The power of search is that when I search using a search engine, I essentially tell the advertiser that I am looking form something. In that case, providing me with an advertisement or commercial offering that matches what I’m looking for is not a difficult task. Hence the success and domination of Google. But, if computer systems are going to predict or analyze my on-line behavior and try to match that with an advertisement or commercial offer that comes at the right time with the right content is much more difficult.  It is precisely for that reason that Beacon failed before it even launched (privacy aspects not even included). Even if Facebook has found out that I have an interest in cars, a commercial message or offering for a new car will only be useful if I am looking for it at that specific time. If I happen to be talking to a friend on Facebook and we chat about cars I would probably be annoyed if a car ad would pop up in that conversation. It would likely make me distrust Facebook. If I start looking at car sites, because I’m looking for a new car, then it wouldn’t be a problem. It isn’t just about content, previous behavior or profile. It is also about context, trust, and things I’m doing right now.

I believe that Ms Dyson is right about the user getting fed up with advertisement. Advertisement is simply one company yelling at a user, who does his best not to listen. Targeted advertisement doesn’t really change the underlying issue, it doesn’t matter how sophisticated it is. It is still one way traffic, and the user can and will ignore it if the context isn’t right.

Providing the user with value is the best way to go as the example from Ms Dyson above shows. But the question is if there is enough context in which this value can be provided when we look at the amount of advertisement money spent on-line. Current on-line advertisement is old-school billboard thinking, translated to the on-line world. Facebook SocialAds and Beacon are potentially powerful advertisement tools which happen to be in a totally wrong context where friends interact. And friends that interact don’t want or need commercial interruptions.

There is still one area in which targeted ads, behavior, preferences, interactions, profiled information can help.

It is in search of course. If I am looking for something I’m essentially opening up the door to advertisement and commercial offerings. Who is going to build me a tool in which I can deliberately contact advertisers to tell them what I’m looking for? Sometimes a direct interaction can be so much simpler than all these indirect behavioral mechanisms to find out what I want. Why not let me ask for it? Now that would be a revolution in advertisement.

Tim O’Reilly writes a good analysis about the announcement of MySpace and Skype that these will integrate MySpace IM and Skype Voice capabilities. Tim predicts that Social Networks will turn into smart address books, that a social network operating system will require interoperability between many applications people connect through and that many niches will appear from all of this. Read his article to get the details.

I like this analysis. Why? Because I believe that social networking isn’t about the network. It should be about the interaction between people. So adding voice capabilities will help support this interaction. But honestly, I don’t think it will be the main driver for change. Earlier I wrote about my 10 wishes to change web 2.0 and move into an era of interaction.

I believe that the first thing that needs to be done is a change of attitude by the service creators. As long as they feel that their way to create value is to protect the value of the network that the users create, things will not change. It is what Tim calls the social operating system. Google has the best cards in hands to accomplish that, with Search, Orkut, Jaiku, the Gphone, rss feeds, the buildup of user base in Asia (where payed mobile services actually work). But a bit of competition here would be welcome. Facebook won’t last, as their monetizing method forces them to use walled gardens and increased ad pressure on its users. This may be a bold prediction, as some think they are worth $15Bln nowadays. But, as with many of such services, in the end, the user will move away because the value he gets from the network is much less than the value he puts into the network.

Voice will be a nice add on, but it won’t be the main driver for interaction. Looking at the behavior of users they spend most of their time using e-mail, SMS, IM. Voice comes way behind that.

So what will do the trick? I think it is our need to formulate questions and search for answers! The true value of having a network of friends around you is you can leverage that network while searching for your needs. Search can be looked at in many ways:

1. The “What is the capital of the United States” question , use Google or any other search engine to do that
2. The “What is a good place to go to on holiday” question. There are two convenient ways of answering that question. First, exploration thought all the different holiday sites. Second, referral from people you trust, a friend providing you with he advice of a possible destination or site to look at.
3.  The “Can anyone explain to me what Newton’s Universal Law of Gravitation is about” question. Well, you could go to Wikipedia and read the information there, but a very good alternative is to see if anyone you know can explain it to you in words you can understand
4. The “What are you doing now”  question. This is always related to someone you know. Twitter like functionality or SMS will serve you right here.
5. The “I didn’t know I had that question”question. A surprise! Where did that come from? Not from search engines, more likely from a friend pointing something to your attention
6. The “I need an urgent answer now” question. Here a search engine might do the trick, but more likely an urgent call, SMS, or IM to a friend might work better.
7. The “I want to be entertained”question. Exploration, or simply sitting back and viewing what is happening to your friends or the world work best here. But honestly, t me, nothing will work better than to hang out in the physical world with people I like. No on-line experience can match that.

I could probably increase this list with more examples, but you catch my drift. There is a lot of discussion whether or not opening the social graphs of people will do the trick. Well, it will certainly help! The search for interaction is what will truly alter the way we think about social networks. Read my 10 wishes to improve web 2.0 and get a much better interaction if you want to know more about that.