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Yahoo to Enable Custom Semantic Search Engines

Written by Marshall Kirkpatrick / February 11, 2009 9:14 AM / 2 Comments


Yahoo is bringing together two of its most interesting projects today, Yahoo BOSS (Build Your Own Search Service) and SearchMonkey, its semantic indexing and search result enhancement service. There were a number of different parts of the announcement – but the core of the story is simple.

Developers will now be able to build their own search engines using the Yahoo! index and search processing infrastructure via BOSS and include the semantic markup added to pages in both results parsing and the display of those results. There’s considerable potential here for some really dazzling results.

We wrote about the genesis of Search Monkey here this Spring, it’s an incredibly ambitious project. The end result of it is rich search results, where additional dynamic data from marked up fields can also be displayed on the search results page itself. So searching for a movie will show not just web pages associated with that movie, but additional details from those pages, like movie ratings, stars, etc. There’s all kinds of possibilities for all kinds of data.

Is anyone using Yahoo! BOSS yet? Anyone who will be able to leverage Search Monkey for a better experience right away? Yahoo is encouraging developers to tag their projects bossmashup in Delicious. As you can see for yourself, there are a number of interesting proofs of concept there but not a whole lot of products. Of the products that are there, very few seem terribly compelling to us so far.

We must admit that the most compelling BOSS implementation so far is over at the site of our competitors TechCrunch. Their new blog network search implementation of BOSS is beautiful – you can see easily, for example, that TechCrunch network blogs have used the word ReadWriteWeb 7 times in the last 6 months. (In case you were wondering.)

Speaking of TechCrunch, that site’s Mark Hendrickson covered the Yahoo BOSS/Search Monkey announcement today as well, and having worked closely on the implementation there he’s got an interesting perspective on it. He points out that the new pricing model, free up to 10,000 queries a day, will likely only impact a handful of big sites – not BOSS add-ons like TechCrunch search or smaller projects.

The other interesting part of the announcement is that BOSS developers will now be allowed to use 3rd party ads on their pages leveraging BOSS – not just Yahoo adds. That’s hopeful.

Can Yahoo do it? Can these two projects brought together lead to awesome search mashups all over the web? We’ve had very high hopes in the past. Now the proof will be in the pudding.

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2009 Predictions and Recommendations for Web 2.0 and Social Networks

Christopher Rollyson

Volatility, Uncertainly and Opportunity—Move Crisply while Competitors Are in Disarray

Now that the Year in Review 2008 has summarized key trends, we are in excellent position for 2009 prognostications, so welcome to Part II. As all experienced executives know, risk and reward are inseparable twins, and periods of disruption elevate both, so you will have much more opportunity to produce uncommon value than normal.

This is a high-stakes year in which we can expect surprises. Web 2.0 and social networks can help because they increase flexibility and adaptiveness. Alas, those who succeed will have to challenge conventional thinking considerably, which is not a trivial exercise in normal times. The volatility that many businesses face will make it more difficult because many of their clients and/or employees will be distracted. It will also make it easier because some of them will perceive that extensive change is afoot, and Web 2.0 will blend in with the cacaphony. Disruption produces unusual changes in markets, and the people that perceive the new patterns and react appropriately emerge as new leaders.

2009 Predictions

These are too diverse to be ranked in any particular order. Please share your reactions and contribute those that I have missed.

  1. The global financial crisis will continue to add significant uncertainty in the global economy in 2009 and probably beyond. I have no scientific basis for this, but there are excellent experts of every flavor on the subject, so take your pick. I believe that we are off the map, and anyone who says that he’s sure of a certain outcome should be considered with a healthy skepticism.
    • All I can say is my friends, clients and sources in investment and commercial banking tell me it’s not over yet, and uncertainty is the only certainty until further notice. This has not yet been fully leeched.
    • Western governments, led the the U.S., are probably prolonging the pain because governments usually get bailouts wrong. However, voters don’t have the stomachs for hardship, so we are probably trading short-term “feel good” efforts for a prolonged adjustment period.
  2. Widespread social media success stories in 2009 in the most easily measurable areas such as talent management, business development, R&D and marketing.
    • 2008 saw a significant increase in enterprise executives’ experimentation with LinkedIn, Facebook, YouTube and enterprise (internal) social networks. These will begin to bear fruit in 2009, after which a “mad rush of adoption” will ensue.
    • People who delay adoption will pay dearly in terms of consulting fees, delayed staff training and retarded results.
  3. Internal social networks will largely disappoint. Similar to intranets, they will produce value, but few enterprises are viable long-term without seamlessly engaging the burgeoning external world of experts.
    In general, the larger and more disparate an organization’s audience
    is, the more value it can create, but culture must encourage emergent, cross-boundary connections, which is where many organizations fall down.

 

  • If you’re a CIO who’s banking heavily on your behind-the-firewall implementation, just be aware that you need to engage externally as well.
  • Do it fast because education takes longer than you think.
  • There are always more smart people outside than inside any organization.
  • Significant consolidation among white label social network vendors, so use your usual customary caution when signing up partners.
    • Due diligence and skill portability will help you to mitigate risks. Any vendor worth their salt will use standardized SOA-friendly architecture and feature sets. As I wrote last year, Web 2.0 is not your father’s software, so focus on people and process more than technology.
    • If your vendor hopeful imposes process on your people, run.
  • No extensive M&A among big branded sites like Facebook, LinkedIn and Twitter although there will probably be some. The concept of the social ecosystem holds that nodes on pervasive networks can add value individually. LinkedIn and Facebook have completely different social contexts. “Traditional” executives tend to view disruptions as “the new thing” that they want to put into a bucket (”let them all buy each other, so I only have to learn one!”). Wrong. This is the new human nervous system, and online social venues, like their offline counterparts, want specificity because they add more value that way. People hack together the networks to which they belong based on their goals and interests.
    • LinkedIn is very focused on the executive environment, and they will not buy Facebook or Twitter. They might buy a smaller company. They are focused on building an executive collaboration platform, and a large acquisition would threaten their focus. LinkedIn is in the initial part of its value curve, they have significant cash, and they’re profitable. Their VCs can smell big money down the road, so they won’t sell this year.
    • Twitter already turned down Facebook, and my conversations with them lead me to believe that they love their company; and its value is largely undiscovered as of yet. They will hold out as long as they can.
    • Facebook has staying power past 2009. They don’t need to buy anyone of import; they are gaining global market share at a fast clip. They already enable customers to build a large part of the Facebook experience, and they have significant room to innovate. Yes, there is a backlash in some quarters against their size. I don’t know Mark Zuckerberg personally, and I don’t have a feeling for his personal goals.
    • I was sad to see that Dow Jones sold out to NewsCorp and, as a long-time Wall Street Journal subscriber, I am even more dismayed now. This will prove a quintessential example of value destruction. The Financial Times currently fields a much better offering. The WSJ is beginning to look like MySpace! As for MySpace itself, I don’t have a firm bead on it but surmise that it has a higher probability of major M&A than the aforementioned: its growth has stalled, Facebook continues to gain, and Facebook uses more Web 2.0 processes, so I believe it will surpass MySpace in terms of global audience.
    • In being completely dominant, Google is the Wal-Mart of Web 2.0, and I don’t have much visibility into their plans, but I think they could make significant waves in 2009. They are very focused on applying search innovation to video, which is still in the initial stages of adoption, so YouTube is not going anywhere.
    • I am less familiar with Digg, Xing, Bebo, Cyworld. Of course, Orkut is part of the Googleverse.
  • Significant social media use by the Obama Administration. It has the knowledge, experience and support base to pursue fairly radical change. Moreover, the degree of change will be in synch with the economy: if there is a significant worsening, expect the government to engage people to do uncommon things.
    • Change.gov is the first phase in which supporters or any interested person is invited to contribute thoughts, stories and documents to the transition team. It aims to keep people engaged and to serve the government on a volunteer basis
    • The old way of doing things was to hand out form letters that you would mail to your representative. Using Web 2.0, people can organize almost instantly, and results are visible in real-time. Since people are increasingly online somewhere, the Administration will invite them from within their favorite venue (MySpace, Facebook…).
    • Obama has learned that volunteering provides people with a sense of meaning and importance. Many volunteers become evangelists.
  • Increasing citizen activism against companies and agencies, a disquieting prospect but one that I would not omit from your scenario planning (ask yourself, “How could people come together and magnify some of our blemishes?” more here). To whit:
    • In 2007, an electronic petition opposing pay-per-use road tolls in the UK reached 1.8 million signatories, stalling a major government initiative. Although this did not primarily employ social media, it is indicative of the phenomenon.
    • In Q4 2008, numerous citizen groups organized Facebook groups (25,000 signatures in a very short time) to oppose television and radio taxes, alarming the Swiss government. Citizens are organizing to stop paying obligatory taxes—and to abolish the agency that administers the tax system. Another citizen initiative recently launched on the Internet collected 60,000 signatures to oppose biometric passports. German links. French links.
    • In the most audacious case, Ahmed Maher is using Facebook to try to topple the government of Egypt. According to Wired’s Cairo Activists Use Facebook to Rattle Regime, activists have organized several large demonstrations and have a Facebook group of 70,000 that’s growing fast.
  • Executive employment will continue to feel pressure, and job searches will get increasingly difficult for many, especially those with “traditional” jobs that depend on Industrial Economy organization.
    • In tandem with this, there will be more opportunities for people who can “free-agent” themselves in some form.
    • In 2009, an increasing portion of executives will have success at using social networks to diminish their business development costs, and their lead will subsequently accelerate the leeching of enterprises’ best and brightest, many of whom could have more flexibility and better pay as independents. This is already manifest as displaced executives choose never to go back.
    • The enterprise will continue to unbundle. I have covered this extensively on the Transourcing website.
  • Enterprise clients will start asking for “strategy” to synchronize social media initiatives. Web 2.0 is following the classic adoption pattern: thus far, most enterprises have been using a skunk works approach to their social media initiatives, or they’ve been paying their agencies to learn while delivering services.
    • In the next phase, beginning in 2009, CMOs, CTOs and CIOs will sponsor enterprise level initiatives, which will kick off executive learning and begin enterprise development of social media native skills. After 1-2 years of this, social media will be spearheaded by VPs and directors.
    • Professional services firms (PwC, KPMG, Deloitte..) will begin scrambling to pull together advisory practices after several of their clients ask for strategy help. These firms’ high costs do not permit them to build significantly ahead of demand.
    • Marketing and ad agencies (Leo Burnett, Digitas…) will also be asked for strategy help, but they will be hampered by their desires to maintain the outsourced model; social media is not marketing, even though it will displace certain types of marketing.
    • Strategy houses (McKinsey, BCG, Booz Allen…) will also be confronted by clients asking for social media strategy; their issue will be that it is difficult to quantify, and the implementation piece is not in their comfort zone, reducing revenue per client.
    • Boutiques will emerge to develop seamless strategy and implementation for social networks. This is needed because Web 2.0 and social networks programs involve strategy, but implementation involves little technology when compared to Web 1.0. As I’ll discuss in an imminent article, it will involve much more interpersonal mentoring and program development.
  • Corporate spending on Enterprise 2.0 will be very conservative, and pureplay and white label vendors (and consultants) will need to have strong business cases.
    • CIOs have better things to spend money on, and they are usually reacting to business unit executives who are still getting their arms around the value of Web 2.0, social networks and social media.
    • Enterprise software vendors will release significant Web 2.0 bolt-on improvements to their platforms in 2009. IBM is arguably out in front with Lotus Connections, with Microsoft Sharepoint fielding a solid solution. SAP and Oracle will field more robust solutions this year.
  • The financial crunch will accelerate social network adoption among those focused on substance rather than flash; this is akin to the dotbomb from 2001-2004, no one wanted to do the Web as an end in itself anymore; it flushed out the fluffy offers (and well as some really good ones).
    • Social media can save money.. how much did it cost the Obama campaign in time and money to raise $500 million? Extremely little.
    • People like to get involved and contribute, when you can frame the activity as important and you provide the tools to facilitate meaningful action. Engagement raises profits and can decrease costs. Engaged customers, for example, tend to leave less often than apathetic customers.
    • Social media is usually about engaging volunteer contributors; if you get it right, you will get a lot of help for little cash outlay.
    • Social media presents many new possibilities for revenue, but to see them, look outside existing product silos. Focus on customer experience by engaging customers, not with your organization, but with each other. Customer-customer communication is excellent for learning about experience.
  • Microblogging will completely mainstream even though Twitter is still quite emergent and few solid business cases exist.
    • Twitter (also Plurk, Jaiku, Pownce {just bought by Six Apart and closed}, Kwippy, Tumblr) are unique for two reasons: they incorporate mobility seamlessly, and they chunk communications small; this leads to a great diversity of “usage context”
    • Note that Dell sold $1 million on Twitter in 2008, using it as a channel for existing business.
    • In many businesses, customers will begin expecting your organization to be on Twitter; this year it will rapidly cease to be a novelty.

    2009 Recommendations

    Web 2.0 will affect business and culture far more than Web 1.0 (the internet), which was about real-time information access and transactions via a standards-based network and interface. Web 2.0 enables real-time knowledge and relationships, so it will profoundly affect most organizations’ stakeholders (clients, customers, regulators, employees, directors, investors, the public…). It will change how all types of buying decisions are made.

    As an individual and/or an organization leader, you have the opportunity to adopt more quickly than your peers and increase your relevance to stakeholders as their Web 2.0 expectations of you increase. 2009 will be a year of significant adoption, and I have kept this list short, general and actionable. I have assumed that your organization has been experimenting with various aspects of Web 2.0, that some people have moderate experience. Please feel free to contact me if you would like more specific or advanced information or suggestions. Recommendations are ranked in importance, the most critical at the top.

    1. What: Audit your organization’s Web 2.0 ecosystem, and conduct your readiness assessment. Why: Do this to act with purpose, mature your efforts past experimentation and increase your returns on investment.
      • The ecosystem audit will tell you what stakeholders are doing, and in what venues. Moreover, a good one will tell you trends, not just numbers. In times of rapid adoption, knowing trends is critical, so you can predict the future. Here’s more about audits.
      • The readiness assessment will help you to understand how your value proposition and resources align with creating and maintaining online relationships. The audit has told you what stakeholders are doing, now you need to assess what you can do to engage them on an ongoing basis. Here’s more about readiness assessments.
    2. What: Select a top executive to lead your organization’s adoption of Web 2.0 and social networks. Why: Web 2.0 is changing how people interact, and your organizational competence will be affected considerably, so applying it to your career and business is very important.
      • This CxO should be someone with a track record for innovation and a commitment to leading discontinuous change. Should be philosophically in synch with the idea of emergent organization and cross-boundary collaboration.
      • S/He will coordinate your creation of strategy and programs (part-time). This includes formalizing your Web 2.0 policy, legal and security due diligence.
    3. What: Use an iterative portfolio approach to pursue social media initiatives in several areas of your business, and chunk investments small.
      Why: Both iteration and portfolio approaches help you to manage risk and increase returns.
    • Use the results of the audit and the readiness assessment to help you to select the stakeholders you want to engage.
    • Engage a critical mass of stakeholders about things that inspire or irritate them and that you can help them with.
    • All else equal, pilots should include several types of Web 2.0 venues and modes like blogs, big branded networks (Facebook, MySpace), microblogs (Twitter), video and audio.
    • As a general rule, extensive opportunity exists where you can use social media to cross boundaries, which usually impose high costs and prevent collaboration. One of the most interesting in 2009 will be encouraging alumni, employees and recruits to connect and collaborate according to their specific business interests. This can significantly reduce your organization’s business development, sales and talent acquisition costs. For more insight to this, see Alumni 2.0.
    • Don’t overlook pilots with multiple returns, like profile management programs, which can reduce your talent acquisition and business development costs. Here’s more on profile management.

     

  • What: Create a Web 2.0 community with numerous roles to enable employees flexibility.
    Why: You want to keep investments small and let the most motivated employees step forward.

    • Roles should include volunteers for pilots, mentors (resident bloggers, video producers and others), community builders (rapidly codify the knowledge you are gathering from pilots), some part-time more formal roles. Perhaps a full-time person to coordinate would make sense. Roles can be progressive and intermittent. Think of this as open source.
    • To stimulate involvement, the program must be meaningful, and it must be structured to minimize conflicts with other responsibilities.
  • What: Avoid the proclivity to treat Web 2.0 as a technology initiative. Why: Web 1.0 (the Internet) involved more of IT than does Web 2.0, and many people are conditioned to think that IT drives innovation; they fall in the tech trap, select tools first and impose process. This is old school and unnecessary because the tools are far more flexible than the last generation software with which many are still familiar.
    • People create the value when they get involved, and technology often gets in the way by making investments in tools that impose process on people and turn them off. Web 2.0 tools impose far less process on people.
    • More important than what brand you invest in is your focus on social network processes and how they add value to existing business processes. If you adopt smartly, you will be able to transfer assets and processes elsewhere while minimizing disruption. More likely is that some brands will disappear (Pownce closed its doors 15 December). When you focus your organization on mastering process and you distribute learning, you will be more flexible with the tools.
    • Focus on process and people, and incent people to gather and share knowledge and help each other. This will increase your flexibility with tools.
  • What: Manage consulting, marketing and technology partners with a portfolio strategy. Why: Maximize flexibility and minimize risk.
    • From the technology point of view, there are three main vendor flavors: enterprise bolt-on (i.e. Lotus Connections), pureplay white label vendors (SmallWorldLabs) and open (Facebook, LinkedIn). As a group, pureplays have the most diversity in terms of business models, and the most uncertainty. Enterprise bolt-ons’ biggest risk is that they lag significantly behind. More comparisons here.
    • Fight the urge to go with one. If you’re serious about getting business value, you need to be in the open cross-boundary networks. If you have a Lotus or Microsoft relationship, compare Connections and Sharepoint with some pureplays to address private social network needs. An excellent way to start could be with Yammer.
    • Be careful when working with consulting- and marketing-oriented partners who are accustomed to an outsourced model. Web 2.0 is not marketing; it is communicating to form relationships and collaborate online. It does have extensive marketing applications; make sure partners have demonstrated processes for mentoring because Web 2.0 will be a core capability for knowledge-based organizations, and you need to build your resident knowledge.
  • Parting Shots

    I hope you find these thoughts useful, and I encourage you to add your insights and reactions as comments. If you have additional questions about how to use Web 2.0, please feel free to contact me. I wish all the best to you in 2009.

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    Evolving Trends

    Wikipedia 3.0: The End of Google?

    In Uncategorized on June 26, 2006 at 5:18 am

    Author: Marc Fawzi

    License: Attribution-NonCommercial-ShareAlike 3.0

    Announcements:

    Semantic Web Developers:

    Feb 5, ‘07: The following external reference concerns the use of rule-based inference engines and ontologies in implementing the Semantic Web + AI vision (aka Web 3.0):

    1. Description Logic Programs: Combining Logic Programs with Description Logic (note: there are better, simpler ways of achieving the same purpose.)

    Click here for more info and a list of related articles…

    Forward

    Two years after I published this article it has received over 200,000 hits and we now have several startups attempting to apply Semantic Web technology to Wikipedia and knowledge wikis in general, including Wikipedia founder’s own commercial startup as well as a startup that was recently purchased by Microsoft.

    Recently, after seeing how Wikipedia’s governance is so flawed, I decided to write about a way to decentralize and democratize Wikipedia.

    Versión española

    Article

    (Article was last updated at 10:15am EST, July 3, 2006)

    Wikipedia 3.0: The End of Google?

     

    The Semantic Web (or Web 3.0) promises to “organize the world’s information” in a dramatically more logical way than Google can ever achieve with their current engine design. This is specially true from the point of view of machine comprehension as opposed to human comprehension.The Semantic Web requires the use of a declarative ontological language like OWL to produce domain-specific ontologies that machines can use to reason about information and make new conclusions, not simply match keywords.

    However, the Semantic Web, which is still in a development phase where researchers are trying to define the best and most usable design models, would require the participation of thousands of knowledgeable people over time to produce those domain-specific ontologies necessary for its functioning.

    Machines (or machine-based reasoning, aka AI software or ‘info agents’) would then be able to use those laboriously –but not entirely manually– constructed ontologies to build a view (or formal model) of how the individual terms within the information relate to each other. Those relationships can be thought of as the axioms (assumed starting truths), which together with the rules governing the inference process both enable as well as constrain the interpretation (and well-formed use) of those terms by the info agents to reason new conclusions based on existing information, i.e. to think. In other words, theorems (formal deductive propositions that are provable based on the axioms and the rules of inference) may be generated by the software, thus allowing formal deductive reasoning at the machine level. And given that an ontology, as described here, is a statement of Logic Theory, two or more independent info agents processing the same domain-specific ontology will be able to collaborate and deduce an answer to a query, without being driven by the same software.

    Thus, and as stated, in the Semantic Web individual machine-based agents (or a collaborating group of agents) will be able to understand and use information by translating concepts and deducing new information rather than just matching keywords.

    Once machines can understand and use information, using a standard ontology language, the world will never be the same. It will be possible to have an info agent (or many info agents) among your virtual AI-enhanced workforce each having access to different domain specific comprehension space and all communicating with each other to build a collective consciousness.

    You’ll be able to ask your info agent or agents to find you the nearest restaurant that serves Italian cuisine, even if the restaurant nearest you advertises itself as a Pizza joint as opposed to an Italian restaurant. But that is just a very simple example of the deductive reasoning machines will be able to perform on information they have.

    Far more awesome implications can be seen when you consider that every area of human knowledge will be automatically within the comprehension space of your info agents. That is because each info agent can communicate with other info agents who are specialized in different domains of knowledge to produce a collective consciousness (using the Borg metaphor) that encompasses all human knowledge. The collective “mind” of those agents-as-the-Borg will be the Ultimate Answer Machine, easily displacing Google from this position, which it does not truly fulfill.

    The problem with the Semantic Web, besides that researchers are still debating which design and implementation of the ontology language model (and associated technologies) is the best and most usable, is that it would take thousands or tens of thousands of knowledgeable people many years to boil down human knowledge to domain specific ontologies.

    However, if we were at some point to take the Wikipedia community and give them the right tools and standards to work with (whether existing or to be developed in the future), which would make it possible for reasonably skilled individuals to help reduce human knowledge to domain-specific ontologies, then that time can be shortened to just a few years, and possibly to as little as two years.

    The emergence of a Wikipedia 3.0 (as in Web 3.0, aka Semantic Web) that is built on the Semantic Web model will herald the end of Google as the Ultimate Answer Machine. It will be replaced with “WikiMind” which will not be a mere search engine like Google is but a true Global Brain: a powerful pan-domain inference engine, with a vast set of ontologies (a la Wikipedia 3.0) covering all domains of human knowledge, that can reason and deduce answers instead of just throwing raw information at you using the outdated concept of a search engine.

    Notes

    After writing the original post I found out that a modified version of the Wikipedia application, known as “Semantic” MediaWiki has already been used to implement ontologies. The name that they’ve chosen is Ontoworld. I think WikiMind would have been a cooler name, but I like ontoworld, too, as in “it descended onto the world,” since that may be seen as a reference to the global mind a Semantic-Web-enabled version of Wikipedia could lead to.

    Google’s search engine technology, which provides almost all of their revenue, could be made obsolete in the near future. That is unless they have access to Ontoworld or some such pan-domain semantic knowledge repository such that they tap into their ontologies and add inference capability to Google search to build formal deductive intelligence into Google.

    But so can Ask.com and MSN and Yahoo…

    I would really love to see more competition in this arena, not to see Google or any one company establish a huge lead over others.

    The question, to rephrase in Churchillian terms, is wether the combination of the Semantic Web and Wikipedia signals the beginning of the end for Google or the end of the beginning. Obviously, with tens of billions of dollars at stake in investors’ money, I would think that it is the latter. No one wants to see Google fail. There’s too much vested interest. However, I do want to see somebody out maneuver them (which can be done in my opinion.)

    Clarification

    Please note that Ontoworld, which currently implements the ontologies, is based on the “Wikipedia” application (also known as MediaWiki), but it is not the same as Wikipedia.org.

    Likewise, I expect Wikipedia.org will use their volunteer workforce to reduce the sum of human knowledge that has been entered into their database to domain-specific ontologies for the Semantic Web (aka Web 3.0) Hence, “Wikipedia 3.0.”

    Response to Readers’ Comments

    The argument I’ve made here is that Wikipedia has the volunteer resources to produce the needed Semantic Web ontologies for the domains of knowledge that it currently covers, while Google does not have those volunteer resources, which will make it reliant on Wikipedia.

    Those ontologies together with all the information on the Web, can be accessed by Google and others but Wikipedia will be in charge of the ontologies for the large set of knowledge domains they currently cover, and that is where I see the power shift.

    Google and other companies do not have the resources in man power (i.e. the thousands of volunteers Wikipedia has) who would help create those ontologies for the large set of knowledge domains that Wikipedia covers. Wikipedia does, and is positioned to do that better and more effectively than anyone else. Its hard to see how Google would be able create the ontologies for all domains of human knowledge (which are continuously growing in size and number) given how much work that would require. Wikipedia can cover more ground faster with their massive, dedicated force of knowledgeable volunteers.

    I believe that the party that will control the creation of the ontologies (i.e. Wikipedia) for the largest number of domains of human knowledge, and not the organization that simply accesses those ontologies (i.e. Google), will have a competitive advantage.

    There are many knowledge domains that Wikipedia does not cover. Google will have the edge there but only if people and organizations that produce the information also produce the ontologies on their own, so that Google can access them from its future Semantic Web engine. My belief is that it would happen but very slowly, and that Wikipedia can have the ontologies done for all the domain of knowledge that it currently covers much faster, and then they would have leverage by the fact that they would be in charge of those ontologies (aka the basic layer for AI enablement.)

    It still remains unclear, of course, whether the combination of Wikipedia and the Semantic Web herald the beginning of the end for Google or the end of the beginning. As I said in the original part of the post, I believe that it is the latter, and the question I pose in the title of this post, in this context, is not more than rhetorical. However, I could be wrong in my judgment and Google could fall behind Wikipedia as the world’s ultimate answer machine.

    After all, Wikipedia makes “us” count. Google doesn’t. Wikipedia derives its power from “us.” Google derives its power from its technology and inflated stock price. Who would you count on to change the world?

    Response to Basic Questions Raised by the Readers

    Reader divotdave asked a few questions, which I thought to be very basic in nature (i.e. important.) I believe more people will be pondering about the same issues, so I’m to including here them with the replies.

    Question:
    How does it distinguish between good information and bad? How does it determine which parts of the sum of human knowledge to accept and which to reject?

    Reply:
    It wouldn’t have to distinguish between good vs bad information (not to be confused with well-formed vs badly formed) if it was to use a reliable source of information (with associated, reliable ontologies.) That is if the information or knowledge to be sought can be derived from Wikipedia 3.0 then it assumes that the information is reliable.

    However, with respect to connecting the dots when it comes to returning information or deducing answers from the sea of information that lies beyond Wikipedia then your question becomes very relevant. How would it distinguish good information from bad information so that it can produce good knowledge (aka comprehended information, aka new information produced through deductive reasoning based on exiting information.)

    Question:
    Who, or what as the case may be, will determine what information is irrelevant to me as the inquiring end user?

    Reply:
    That is a good question and one which would have to be answered by the researchers working on AI engines for Web 3.0

    There will be assumptions made as to what you are inquiring about. Just as when I saw your question I had to make assumption about what you really meant to ask me, AI engines would have to make an assumption, pretty much based on the same cognitive process humans use, which is the topic of a separate post, but which has been covered by many AI researchers.

    Question:
    Is this to say that ultimately some over-arching standard will emerge that all humanity will be forced (by lack of alternative information) to conform to?

    Reply:
    There is no need for one standard, except when it comes to the language the ontologies are written in (e.g OWL, OWL-DL, OWL Full etc.) Semantic Web researchers are trying to determine the best and most usable choice, taking into consideration human and machine performance in constructing –and exclusive in the latter case– interpreting those ontologies.

    Two or more info agents working with the same domain-specific ontology but having different software (different AI engines) can collaborate with each other.

    The only standard required is that of the ontology language and associated production tools.

    Addendum

    On AI and Natural Language Processing

    I believe that the first generation of AI that will be used by Web 3.0 (aka Semantic Web) will be based on relatively simple inference engines that will NOT attempt to perform natural language processing, where current approaches still face too many serious challenges. However, they will still have the formal deductive reasoning capabilities described earlier in this article, and users would interact with these systems through some query language.

    On the Debate about the Nature and Definition of AI

    The embedding of AI into cyberspace will be done at first with relatively simple inference engines (that use algorithms and heuristics) that work collaboratively in P2P fashion and use standardized ontologies. The massively parallel interactions between the hundreds of millions of AI Agents that will run within the millions of P2P AI Engines on users’ PCs will give rise to the very complex behavior that is the future global brain.

    Related:

    1. Web 3.0 Update
    2. All About Web 3.0 <– list of all Web 3.0 articles on this site
    3. P2P 3.0: The People’s Google
    4. Reality as a Service (RaaS): The Case for GWorld <– 3D Web + Semantic Web + AI
    5. For Great Justice, Take Off Every Digg
    6. Google vs Web 3.0
    7. People-Hosted “P2P” Version of Wikipedia
    8. Beyond Google: The Road to a P2P Economy


    Update on how the Wikipedia 3.0 vision is spreading:


    Update on how Google is co-opting the Wikipedia 3.0 vision:



    Web 3D Fans:

    Here is the original Web 3D + Semantic Web + AI article:

    Web 3D + Semantic Web + AI *

    The above mentioned Web 3D + Semantic Web + AI vision which preceded the Wikipedia 3.0 vision received much less attention because it was not presented in a controversial manner. This fact was noted as the biggest flaw of social bookmarking site digg which was used to promote this article.

    Web 3.0 Developers:

    Feb 5, ‘07: The following external reference concerns the use of rule-based inference engines and ontologies in implementing the Semantic Web + AI vision (aka Web 3.0):

    1. Description Logic Programs: Combining Logic Programs with Description Logic (note: there are better, simpler ways of achieving the same purpose.)

    Jan 7, ‘07: The following Evolving Trends post discusses the current state of semantic search engines and ways to improve the paradigm:

    1. Designing a Better Web 3.0 Search Engine

    June 27, ‘06: Semantic MediaWiki project, enabling the insertion of semantic annotations (or metadata) into the content:

    1. http://semantic-mediawiki.org/wiki/Semantic_MediaWiki (see note on Wikia below)

    Wikipedia’s Founder and Web 3.0

    (more…)

    Read Full Post »

    Evolving Trends

    Google Warming Up to the Wikipedia 3.0 vision?

    In Uncategorized on December 14, 2007 at 8:09 pm

    [source: slashdot.org]

    Google’s “Knol” Reinvents Wikipedia

    Posted by CmdrTaco on Friday December 14, @08:31AM
    from the only-a-matter-of-time dept.

     

    teslatug writes “Google appears to be reinventing Wikipedia with their new product that they call knol (not yet publicly available). In an attempt to gather human knowledge, Google will accept articles from users who will be credited with the article by name. If they want, they can allow ads to appear alongside the content and they will be getting a share of the profits if that’s the case. Other users will be allowed to rate, edit or comment on the articles. The content does not have to be exclusive to Google but no mention is made on any license for it. Is this a better model for free information gathering?”

    This article Wikipedia 3.0: The End of Google?  which gives you an idea why Google would want its own Wikipedia was on the Google Finance page for at least 3 months when anyone looked up the Google stock symbol, so Google employees, investors and executive must have seen it. 

    Is it a coincidence that Google is building its own Wikipedia now?

    The only problem is a flaw in Google’s thinking. People who author those articles on Wikipedia actually have brains. People with brains tend to have principles. Getting paid pennies to build the Google empire is rarely one of those principles.

    Related

    Read Full Post »

    Tech Biz  :  IT   

    Murdoch Calls Google, Yahoo Copyright Thieves — Is He Right?

    By David Kravets EmailApril 03, 2009 | 5:00:18 PMCategories: Intellectual Property  

    Murdoch_2 Rupert Murdoch, the owner of News Corp. and The Wall Street Journal, says Google and Yahoo are giant copyright scofflaws that steal the news.

    “The question is, should we be allowing Google to steal all our copyright … not steal, but take,” Murdoch says. “Not just them, but Yahoo.”

    But whether search-engine news aggregation is theft or a protected fair use under copyright law is unclear, even as Google and Yahoo profit tremendously from linking to news. So maybe Murdoch is right.

    Murdoch made his comments late Thursday during an address at the Cable Show, an industry event held in Washington. He seemingly was blaming the web, and search engines, for the news media’s ills.

    “People reading news for free on the web, that’s got to change,” he said.

    Real estate magnate Sam Zell made similar comments in 2007 when he took over the Tribune Company and ran it into bankruptcy.

    We suspect Zell and Murdoch are just blowing smoke. If they were not, perhaps they could demand Google and Yahoo remove their news content. The search engines would kindly oblige.

    Better yet, if Murdoch and Zell are so set on monetizing their web content, they should sue the search engines and claim copyright violations in a bid to get the engines to pay for the content.

    The outcome of such a lawsuit is far from clear.

    It’s unsettled whether search engines have a valid fair use claim under the Digital Millennium Copyright Act. The news headlines are copied verbatim, as are some of the snippets that go along.

    Fred von Lohmann of the Electronic Frontier Foundation points out that “There’s not a rock-solid ruling on the question.”

    Should the search engines pay up for the content? Tell us what you think.

    Read Full Post »

    The Grid: The Next-Gen Internet?

    Douglas Heingartner Email 03.08.01 | 2:00 AM

    AMSTERDAM, Netherlands — The Matrix may be the future of virtual reality, but researchers say the Grid is the future of collaborative problem-solving.

    More than 400 scientists gathered at the Global Grid Forum this week to discuss what may be the Internet’s next evolutionary step.

    Though distributed computing evokes associations with populist initiatives like SETI@home, where individuals donate their spare computing power to worthy projects, the Grid will link PCs to each other and the scientific community like never before.

     

    The Grid will not only enable sharing of documents and MP3 files, but also connect PCs with sensors, telescopes and tidal-wave simulators.

    IBM’s Brian Carpenter suggested “computing will become a utility just like any other utility.”

    Carpenter said, “The Grid will open up … storage and transaction power in the same way that the Web opened up content.” And just as the Internet connects various public and private networks, Cisco Systems’ Bob Aiken said, “you’re going to have multiple grids, multiple sets of middleware that people are going to choose from to satisfy their applications.”

    As conference moderator Walter Hoogland suggested, “The World Wide Web gave us a taste, but the Grid gives a vision of an ICT (Information and Communication Technology)-enabled world.”

    Though the task of standardizing everything from system templates to the definitions of various resources is a mammoth one, the GGF can look to the early days of the Web for guidance. The Grid that organizers are building is a new kind of Internet, only this time with the creators having a better knowledge of where the bottlenecks and teething problems will be.

    The general consensus at the event was that although technical issues abound, the thorniest issues will involve social and political dimensions, for example how to facilitate sharing between strangers where there is no history of trust.

    Amsterdam seemed a logical choice for the first Global Grid Forum because not only is it the world’s most densely cabled city, it was also home to the Internet Engineering Task Force’s first international gathering in 1993. The IETF has served as a model for many of the GGF’s activities: protocols, policy issues, and exchanging experiences.

    The Grid Forum, a U.S.-based organization combined with eGrid – the European Grid Forum, and Asian counterparts to create the Global Grid Forum (GGF) in November, 2000.

    The Global Grid Forum organizers said grid communities in the United States and Europe will now run in synch.

    The Grid evolved from the early desire to connect supercomputers into “metacomputers” that could be remotely controlled. The word “grid” was borrowed from the electricity grid, to imply that any compatible device could be plugged in anywhere on the Grid and be guaranteed a certain level of resources, regardless of where those resources might come from.

    Scientific communities at the conference discussed what the compatibility standards should be, and how extensive the protocols need to be.

    As the number of connected devices runs from the thousands into the millions, the policy issues become exponentially more complex. So far, only draft consensus has been reached on most topics, but participants say these are the early days.

    As with the Web, the initial impetus for a grid came from the scientific community, specifically high-energy physics, which needed extra resources to manage and analyze the huge amounts of data being collected.

    The most nettlesome issues for industry are security and accounting. But unlike the Web, which had security measures tacked on as an afterthought, the Grid is being designed from the ground up as a secure system.


    Conference participants debated what types of services (known in distributed computing circles as resource units) provided through the Grid will be charged for. And how will the administrative authority be centralized?

    Corporations have been slow to cotton to this new technology’s potential, but the suits are in evidence at this year’s Grid event. As GGF chairman Charlie Catlett noted, “This is the first time I’ve seen this many ties at a Grid forum.”

    In addition to IBM, firms such as Boeing, Philips and Unilever are already taking baby steps toward the Grid.

    Though commercial needs tend to be more transaction-focused than those of scientific pursuits, most of the technical requirements are common. Furthermore, both science and industry participants say they require a level of reliability that’s not offered by current peer-to-peer initiatives: Downloading from Napster, for example, can take seconds or minutes, or might not work at all.

    Garnering commercial interest is critical to the Grid’s future. Cisco’s Aiken explained that “if grids are really going to take off and become the major impetus for the next level of evolution in the Internet, we have to have something that allows (them) to easily transfer to industry.”

    Other potential Grid components include creating a virtual observatory, and doctors performing simulations of blood flows. While some of these applications have existed for years, the Grid will make them routine rather than exceptional.

    The California Institute of Technology’s Paul Messina said that by sharing computing resources, “you get more science from the same investment.”

    Ian Foster of the University of Chicago said that Web precursor Arpanet was initially intended to be a distributed computing network that would share CPU-intensive tasks but instead wound up giving birth to e-mail and FTP.

    The Grid may give birth to a global file-swapping network or a members-only citadel for moneyed institutions. But just as no one ten years ago would have conceived of Napster — not to mention AmIHotOrNot.com — the future of the Grid is unknown.

    An associated DataGrid conference continues until Friday, focusing on a project in which resources from Pan-European research institutions will analyze data generated by a new particle collider being built at Swiss particle-physics lab CERN.

    Read Full Post »

    WIRED MAGAZINE: 16.03

    Tech Biz  :  IT   RSS

    Free! Why $0.00 Is the Future of Business

    By Chris Anderson Email 02.25.08 | 12:00 AM

    At the age of 40, King Gillette was a frustrated inventor, a bitter anticapitalist, and a salesman of cork-lined bottle caps. It was 1895, and despite ideas, energy, and wealthy parents, he had little to show for his work. He blamed the evils of market competition. Indeed, the previous year he had published a book, The Human Drift, which argued that all industry should be taken over by a single corporation owned by the public and that millions of Americans should live in a giant city called Metropolis powered by Niagara Falls. His boss at the bottle cap company, meanwhile, had just one piece of advice: Invent something people use and throw away.One day, while he was shaving with a straight razor that was so worn it could no longer be sharpened, the idea came to him. What if the blade could be made of a thin metal strip? Rather than spending time maintaining the blades, men could simply discard them when they became dull. A few years of metallurgy experimentation later, the disposable-blade safety razor was born. But it didn’t take off immediately. In its first year, 1903, Gillette sold a total of 51 razors and 168 blades. Over the next two decades, he tried every marketing gimmick he could think of. He put his own face on the package, making him both legendary and, some people believed, fictional. He sold millions of razors to the Army at a steep discount, hoping the habits soldiers developed at war would carry over to peacetime. He sold razors in bulk to banks so they could give them away with new deposits (“shave and save” campaigns). Razors were bundled with everything from Wrigley’s gum to packets of coffee, tea, spices, and marshmallows. The freebies helped to sell those products, but the tactic helped Gillette even more. By giving away the razors, which were useless by themselves, he was creating demand for disposable blades. A few billion blades later, this business model is now the foundation of entire industries: Give away the cell phone, sell the monthly plan; make the videogame console cheap and sell expensive games; install fancy coffeemakers in offices at no charge so you can sell managers expensive coffee sachets.

    Chris Anderson discusses “Free.”

    Video produced by Annaliza Savage and edited by Michael Lennon.

    Thanks to Gillette, the idea that you can make money by giving something away is no longer radical. But until recently, practically everything “free” was really just the result of what economists would call a cross-subsidy: You’d get one thing free if you bought another, or you’d get a product free only if you paid for a service.

    Over the past decade, however, a different sort of free has emerged. The new model is based not on cross-subsidies — the shifting of costs from one product to another — but on the fact that the cost of products themselves is falling fast. It’s as if the price of steel had dropped so close to zero that King Gillette could give away both razor and blade, and make his money on something else entirely. (Shaving cream?)

    You know this freaky land of free as the Web. A decade and a half into the great online experiment, the last debates over free versus pay online are ending. In 2007 The New York Times went free; this year, so will much of The Wall Street Journal. (The remaining fee-based parts, new owner Rupert Murdoch announced, will be “really special … and, sorry to tell you, probably more expensive.” This calls to mind one version of Stewart Brand’s original aphorism from 1984: “Information wants to be free. Information also wants to be expensive … That tension will not go away.”)

    Once a marketing gimmick, free has emerged as a full-fledged economy. Offering free music proved successful for Radiohead, Trent Reznor of Nine Inch Nails, and a swarm of other bands on MySpace that grasped the audience-building merits of zero. The fastest-growing parts of the gaming industry are ad-supported casual games online and free-to-try massively multiplayer online games. Virtually everything Google does is free to consumers, from Gmail to Picasa to GOOG-411.

    The rise of “freeconomics” is being driven by the underlying technologies that power the Web. Just as Moore’s law dictates that a unit of processing power halves in price every 18 months, the price of bandwidth and storage is dropping even faster. Which is to say, the trend lines that determine the cost of doing business online all point the same way: to zero.

    But tell that to the poor CIO who just shelled out six figures to buy another rack of servers. Technology sure doesn’t feel free when you’re buying it by the gross. Yet if you look at it from the other side of the fat pipe, the economics change. That expensive bank of hard drives (fixed costs) can serve tens of thousands of users (marginal costs). The Web is all about scale, finding ways to attract the most users for centralized resources, spreading those costs over larger and larger audiences as the technology gets more and more capable. It’s not about the cost of the equipment in the racks at the data center; it’s about what that equipment can do. And every year, like some sort of magic clockwork, it does more and more for less and less, bringing the marginal costs of technology in the units that we individuals consume closer to zero.

    Photo Illustration: Jeff Mermelstein

    As much as we complain about how expensive things are getting, we’re surrounded by forces that are making them cheaper. Forty years ago, the principal nutritional problem in America was hunger; now it’s obesity, for which we have the Green Revolution to thank. Forty years ago, charity was dominated by clothing drives for the poor. Now you can get a T-shirt for less than the price of a cup of coffee, thanks to China and global sourcing. So too for toys, gadgets, and commodities of every sort. Even cocaine has pretty much never been cheaper (globalization works in mysterious ways).

    Digital technology benefits from these dynamics and from something else even more powerful: the 20th-century shift from Newtonian to quantum machines. We’re still just beginning to exploit atomic-scale effects in revolutionary new materials — semiconductors (processing power), ferromagnetic compounds (storage), and fiber optics (bandwidth). In the arc of history, all three substances are still new, and we have a lot to learn about them. We are just a few decades into the discovery of a new world.

    What does this mean for the notion of free? Well, just take one example. Last year, Yahoo announced that Yahoo Mail, its free webmail service, would provide unlimited storage. Just in case that wasn’t totally clear, that’s “unlimited” as in “infinite.” So the market price of online storage, at least for email, has now fallen to zero (see “Webmail Windfall“). And the stunning thing is that nobody was surprised; many had assumed infinite free storage was already the case.

    For good reason: It’s now clear that practically everything Web technology touches starts down the path to gratis, at least as far as we consumers are concerned. Storage now joins bandwidth (YouTube: free) and processing power (Google: free) in the race to the bottom. Basic economics tells us that in a competitive market, price falls to the marginal cost. There’s never been a more competitive market than the Internet, and every day the marginal cost of digital information comes closer to nothing.

    One of the old jokes from the late-’90s bubble was that there are only two numbers on the Internet: infinity and zero. The first, at least as it applied to stock market valuations, proved false. But the second is alive and well. The Web has become the land of the free.

    The result is that we now have not one but two trends driving the spread of free business models across the economy. The first is the extension of King Gillette’s cross-subsidy to more and more industries. Technology is giving companies greater flexibility in how broadly they can define their markets, allowing them more freedom to give away products or services to one set of customers while selling to another set. Ryanair, for instance, has disrupted its industry by defining itself more as a full-service travel agency than a seller of airline seats (see “How Can Air Travel Be Free?”).

    The second trend is simply that anything that touches digital networks quickly feels the effect of falling costs. There’s nothing new about technology’s deflationary force, but what is new is the speed at which industries of all sorts are becoming digital businesses and thus able to exploit those economics. When Google turned advertising into a software application, a classic services business formerly based on human economics (things get more expensive each year) switched to software economics (things get cheaper). So, too, for everything from banking to gambling. The moment a company’s primary expenses become things based in silicon, free becomes not just an option but the inevitable destination.

    WASTE AND WASTE AGAIN
    Forty years ago, Caltech professor Carver Mead identified the corollary to Moore’s law of ever-increasing computing power. Every 18 months, Mead observed, the price of a transistor would halve. And so it did, going from tens of dollars in the 1960s to approximately 0.000001 cent today for each of the transistors in Intel’s latest quad-core. This, Mead realized, meant that we should start to “waste” transistors.

    Waste is a dirty word, and that was especially true in the IT world of the 1970s. An entire generation of computer professionals had been taught that their job was to dole out expensive computer resources sparingly. In the glass-walled facilities of the mainframe era, these systems operators exercised their power by choosing whose programs should be allowed to run on the costly computing machines. Their role was to conserve transistors, and they not only decided what was worthy but also encouraged programmers to make the most economical use of their computer time. As a result, early developers devoted as much code as possible to running their core algorithms efficiently and gave little thought to user interface. This was the era of the command line, and the only conceivable reason someone might have wanted to use a computer at home was to organize recipe files. In fact, the world’s first personal computer, a stylish kitchen appliance offered by Honeywell in 1969, came with integrated counter space.

    Photo Illustration: Jeff Mermelstein

    And here was Mead, telling programmers to embrace waste. They scratched their heads — how do you waste computer power? It took Alan Kay, an engineer working at Xerox’s Palo Alto Research Center, to show them. Rather than conserve transistors for core processing functions, he developed a computer concept — the Dynabook — that would frivolously deploy silicon to do silly things: draw icons, windows, pointers, and even animations on the screen. The purpose of this profligate eye candy? Ease of use for regular folks, including children. Kay’s work on the graphical user interface became the inspiration for the Xerox Alto, and then the Apple Macintosh, which changed the world by opening computing to the rest of us. (We, in turn, found no shortage of things to do with it; tellingly, organizing recipes was not high on the list.)

    Of course, computers were not free then, and they are not free today. But what Mead and Kay understood was that the transistors in them — the atomic units of computation — would become so numerous that on an individual basis, they’d be close enough to costless that they might as well be free. That meant software writers, liberated from worrying about scarce computational resources like memory and CPU cycles, could become more and more ambitious, focusing on higher-order functions such as user interfaces and new markets such as entertainment. And that meant software of broader appeal, which brought in more users, who in turn found even more uses for computers. Thanks to that wasteful throwing of transistors against the wall, the world was changed.

    What’s interesting is that transistors (or storage, or bandwidth) don’t have to be completely free to invoke this effect. At a certain point, they’re cheap enough to be safely disregarded. The Greek philosopher Zeno wrestled with this concept in a slightly different context. In Zeno’s dichotomy paradox, you run toward a wall. As you run, you halve the distance to the wall, then halve it again, and so on. But if you continue to subdivide space forever, how can you ever actually reach the wall? (The answer is that you can’t: Once you’re within a few nanometers, atomic repulsion forces become too strong for you to get any closer.)

    In economics, the parallel is this: If the unitary cost of technology (“per megabyte” or “per megabit per second” or “per thousand floating-point operations per second”) is halving every 18 months, when does it come close enough to zero to say that you’ve arrived and can safely round down to nothing? The answer: almost always sooner than you think.

    What Mead understood is that a psychological switch should flip as things head toward zero. Even though they may never become entirely free, as the price drops there is great advantage to be had in treating them as if they were free. Not too cheap to meter, as Atomic Energy Commission chief Lewis Strauss said in a different context, but too cheap to matter. Indeed, the history of technological innovation has been marked by people spotting such price and performance trends and getting ahead of them.

    From the consumer’s perspective, though, there is a huge difference between cheap and free. Give a product away and it can go viral. Charge a single cent for it and you’re in an entirely different business, one of clawing and scratching for every customer. The psychology of “free” is powerful indeed, as any marketer will tell you.

    This difference between cheap and free is what venture capitalist Josh Kopelman calls the “penny gap.” People think demand is elastic and that volume falls in a straight line as price rises, but the truth is that zero is one market and any other price is another. In many cases, that’s the difference between a great market and none at all.

    The huge psychological gap between “almost zero” and “zero” is why micropayments failed. It’s why Google doesn’t show up on your credit card. It’s why modern Web companies don’t charge their users anything. And it’s why Yahoo gives away disk drive space. The question of infinite storage was not if but when. The winners made their stuff free first.

    Traditionalists wring their hands about the “vaporization of value” and “demonetization” of entire industries. The success of craigslist’s free listings, for instance, has hurt the newspaper classified ad business. But that lost newspaper revenue is certainly not ending up in the craigslist coffers. In 2006, the site earned an estimated $40 million from the few things it charges for. That’s about 12 percent of the $326 million by which classified ad revenue declined that year.

    But free is not quite as simple — or as stupid — as it sounds. Just because products are free doesn’t mean that someone, somewhere, isn’t making huge gobs of money. Google is the prime example of this. The monetary benefits of craigslist are enormous as well, but they’re distributed among its tens of thousands of users rather than funneled straight to Craig Newmark Inc. To follow the money, you have to shift from a basic view of a market as a matching of two parties — buyers and sellers — to a broader sense of an ecosystem with many parties, only some of which exchange cash.

    The most common of the economies built around free is the three-party system. Here a third party pays to participate in a market created by a free exchange between the first two parties. Sound complicated? You’re probably experiencing it right now. It’s the basis of virtually all media.

    In the traditional media model, a publisher provides a product free (or nearly free) to consumers, and advertisers pay to ride along. Radio is “free to air,” and so is much of television. Likewise, newspaper and magazine publishers don’t charge readers anything close to the actual cost of creating, printing, and distributing their products. They’re not selling papers and magazines to readers, they’re selling readers to advertisers. It’s a three-way market.

    In a sense, what the Web represents is the extension of the media business model to industries of all sorts. This is not simply the notion that advertising will pay for everything. There are dozens of ways that media companies make money around free content, from selling information about consumers to brand licensing, “value-added” subscriptions, and direct ecommerce (see How-To Wiki for a complete list). Now an entire ecosystem of Web companies is growing up around the same set of models.

    A TAXONOMY OF FREE
    Between new ways companies have found to subsidize products and the falling cost of doing business in a digital age, the opportunities to adopt a free business model of some sort have never been greater. But which one? And how many are there? Probably hundreds, but the priceless economy can be broken down into six broad categories:

    · “Freemium”
    What’s free: Web software and services, some content. Free to whom: users of the basic version.

    This term, coined by venture capitalist Fred Wilson, is the basis of the subscription model of media and is one of the most common Web business models. It can take a range of forms: varying tiers of content, from free to expensive, or a premium “pro” version of some site or software with more features than the free version (think Flickr and the $25-a-year Flickr Pro).

    Again, this sounds familiar. Isn’t it just the free sample model found everywhere from perfume counters to street corners? Yes, but with a pretty significant twist. The traditional free sample is the promotional candy bar handout or the diapers mailed to a new mother. Since these samples have real costs, the manufacturer gives away only a tiny quantity — hoping to hook consumers and stimulate demand for many more.

    Photo Illustration: Jeff Mermelstein

    But for digital products, this ratio of free to paid is reversed. A typical online site follows the 1 Percent Rule — 1 percent of users support all the rest. In the freemium model, that means for every user who pays for the premium version of the site, 99 others get the basic free version. The reason this works is that the cost of serving the 99 percent is close enough to zero to call it nothing.

    · Advertising
    What’s free: content, services, software, and more. Free to whom: everyone.

    Broadcast commercials and print display ads have given way to a blizzard of new Web-based ad formats: Yahoo’s pay-per-pageview banners, Google’s pay-per-click text ads, Amazon’s pay-per-transaction “affiliate ads,” and site sponsorships were just the start. Then came the next wave: paid inclusion in search results, paid listing in information services, and lead generation, where a third party pays for the names of people interested in a certain subject. Now companies are trying everything from product placement (PayPerPost) to pay-per-connection on social networks like Facebook. All of these approaches are based on the principle that free offerings build audiences with distinct interests and expressed needs that advertisers will pay to reach.

    · Cross-subsidies
    What’s free: any product that entices you to pay for something else. Free to whom: everyone willing to pay eventually, one way or another.

    When Wal-Mart charges $15 for a new hit DVD, it’s a loss leader. The company is offering the DVD below cost to lure you into the store, where it hopes to sell you a washing machine at a profit. Expensive wine subsidizes food in a restaurant, and the original “free lunch” was a gratis meal for anyone who ordered at least one beer in San Francisco saloons in the late 1800s. In any package of products and services, from banking to mobile calling plans, the price of each individual component is often determined by psychology, not cost. Your cell phone company may not make money on your monthly minutes — it keeps that fee low because it knows that’s the first thing you look at when picking a carrier — but your monthly voicemail fee is pure profit.

    On a busy corner in São Paulo, Brazil, street vendors pitch the latest “tecnobrega” CDs, including one by a hot band called Banda Calypso. Like CDs from most street vendors, these did not come from a record label. But neither are they illicit. They came directly from the band. Calypso distributes masters of its CDs and CD liner art to street vendor networks in towns it plans to tour, with full agreement that the vendors will copy the CDs, sell them, and keep all the money. That’s OK, because selling discs isn’t Calypso’s main source of income. The band is really in the performance business — and business is good. Traveling from town to town this way, preceded by a wave of supercheap CDs, Calypso has filled its shows and paid for a private jet.

    The vendors generate literal street cred in each town Calypso visits, and its omnipresence in the urban soundscape means that it gets huge crowds to its rave/dj/concert events. Free music is just publicity for a far more lucrative tour business. Nobody thinks of this as piracy.

    · Zero marginal cost
    What’s free: things that can be distributed without an appreciable cost to anyone. Free to whom: everyone.

    This describes nothing so well as online music. Between digital reproduction and peer-to-peer distribution, the real cost of distributing music has truly hit bottom. This is a case where the product has become free because of sheer economic gravity, with or without a business model. That force is so powerful that laws, guilt trips, DRM, and every other barrier to piracy the labels can think of have failed. Some artists give away their music online as a way of marketing concerts, merchandise, licensing, and other paid fare. But others have simply accepted that, for them, music is not a moneymaking business. It’s something they do for other reasons, from fun to creative expression. Which, of course, has always been true for most musicians anyway.

    · Labor exchange
    What’s free: Web sites and services. Free to whom: all users, since the act of using these sites and services actually creates something of value.

    You can get free porn if you solve a few captchas, those scrambled text boxes used to block bots. What you’re actually doing is giving answers to a bot used by spammers to gain access to other sites — which is worth more to them than the bandwidth you’ll consume browsing images. Likewise for rating stories on Digg, voting on Yahoo Answers, or using Google’s 411 service (see “How Can Directory Assistance Be Free?”). In each case, the act of using the service creates something of value, either improving the service itself or creating information that can be useful somewhere else.

    · Gift economy
    What’s free: the whole enchilada, be it open source software or user-generated content. Free to whom: everyone.

    From Freecycle (free secondhand goods for anyone who will take them away) to Wikipedia, we are discovering that money isn’t the only motivator. Altruism has always existed, but the Web gives it a platform where the actions of individuals can have global impact. In a sense, zero-cost distribution has turned sharing into an industry. In the monetary economy it all looks free — indeed, in the monetary economy it looks like unfair competition — but that says more about our shortsighted ways of measuring value than it does about the worth of what’s created.

    THE ECONOMICS OF ABUNDANCE
    Enabled by the miracle of abundance, digital economics has turned traditional economics upside down. Read your college textbook and it’s likely to define economics as “the social science of choice under scarcity.” The entire field is built on studying trade-offs and how they’re made. Milton Friedman himself reminded us time and time again that “there’s no such thing as a free lunch.

    “But Friedman was wrong in two ways. First, a free lunch doesn’t necessarily mean the food is being given away or that you’ll pay for it later — it could just mean someone else is picking up the tab. Second, in the digital realm, as we’ve seen, the main feedstocks of the information economy — storage, processing power, and bandwidth — are getting cheaper by the day. Two of the main scarcity functions of traditional economics — the marginal costs of manufacturing and distribution — are rushing headlong to zip. It’s as if the restaurant suddenly didn’t have to pay any food or labor costs for that lunch.

    Surely economics has something to say about that?

    It does. The word is externalities, a concept that holds that money is not the only scarcity in the world. Chief among the others are your time and respect, two factors that we’ve always known about but have only recently been able to measure properly. The “attention economy” and “reputation economy” are too fuzzy to merit an academic department, but there’s something real at the heart of both. Thanks to Google, we now have a handy way to convert from reputation (PageRank) to attention (traffic) to money (ads). Anything you can consistently convert to cash is a form of currency itself, and Google plays the role of central banker for these new economies.

    There is, presumably, a limited supply of reputation and attention in the world at any point in time. These are the new scarcities — and the world of free exists mostly to acquire these valuable assets for the sake of a business model to be identified later. Free shifts the economy from a focus on only that which can be quantified in dollars and cents to a more realistic accounting of all the things we truly value today.

    FREE CHANGES EVERYTHING
    Between digital economics and the wholesale embrace of King’s Gillette’s experiment in price shifting, we are entering an era when free will be seen as the norm, not an anomaly. How big a deal is that? Well, consider this analogy: In 1954, at the dawn of nuclear power, Lewis Strauss, head of the Atomic Energy Commission, promised that we were entering an age when electricity would be “too cheap to meter.” Needless to say, that didn’t happen, mostly because the risks of nuclear energy hugely increased its costs. But what if he’d been right? What if electricity had in fact become virtually free?The answer is that everything electricity touched — which is to say just about everything — would have been transformed. Rather than balance electricity against other energy sources, we’d use electricity for as many things as we could — we’d waste it, in fact, because it would be too cheap to worry about.

    All buildings would be electrically heated, never mind the thermal conversion rate. We’d all be driving electric cars (free electricity would be incentive enough to develop the efficient battery technology to store it). Massive desalination plants would turn seawater into all the freshwater anyone could want, irrigating vast inland swaths and turning deserts into fertile acres, many of them making biofuels as a cheaper store of energy than batteries. Relative to free electrons, fossil fuels would be seen as ludicrously expensive and dirty, and so carbon emissions would plummet. The phrase “global warming” would have never entered the language.

    Today it’s digital technologies, not electricity, that have become too cheap to meter. It took decades to shake off the assumption that computing was supposed to be rationed for the few, and we’re only now starting to liberate bandwidth and storage from the same poverty of imagination. But a generation raised on the free Web is coming of age, and they will find entirely new ways to embrace waste, transforming the world in the process. Because free is what you want — and free, increasingly, is what you’re going to get.

    Chris Anderson (canderson@wired.com) is the editor in chief of Wired and author of The Long Tail. His next book, FREE, will be published in 2009 by Hyperion.

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    Comments (63)

    Posted by: danielu23 hours ago1 Point
    Your “Scenario 1” implies you know absolutely NOTHING about the movie business. Distributors and Studios make the money on ticket sales based on a percentage split with the projection houses. The bulk of ticket sales money goes to the Distributors a…
    Posted by: tom2032 days ago1 Point
    The information is not free, it is being paid for (in cash) mostly by advertisers trying to gain the attention of the website visitors. It is also paid for (in time wasted) by the people who are constantly distracted by the ads. Micro-payments were…
    Posted by: mfouts2 days ago1 Point
    That article is absolutley amazing!!! I am currently into buying real estate and I am slowly transitioning into the great world wide web. @ of my partners and I are trying to take advantage of the the www world via http://www.choiceisfreedom.com still under…
    Posted by: foofah2 days ago1 Point
    Great article…but give poor Zeno a break. “The answer is that you can’t [reach the wall]: Once you’re within a few nanometers, atomic repulsion forces become too strong for you to get any closer.” You’ve either missed Zeno’s point entirely, or you’…
    Posted by: RainerGamer2 days ago1 Point
    Sign me up.
    Posted by: Lord_Jim2 days ago1 Point
    Is something really free only because you don’t pay in dollars? What about being bombarded with advertising? What about giving away personal data to dubious parties? What about costly ‘upgrade options’ hidden behind every second button of allegedly …
    Posted by: gdavis951293 days ago1 Point
    Please Mr. Anderson, buy yourself a dictionary. You write: …Yahoo announced that Yahoo Mail… would provide unlimited storage. Just in case that wasn’t totally clear, that’s “unlimited” as in “infinite”. ‘Unlimited’ means that Yahoo will not cap t…
    Posted by: MikeG3 days ago1 Point
    A few months ago I began researching free training & education. To be honest, I didn’t expect to find many good, free items, since I know that it takes time and effort (and time is money) to develop training. But I hoped my efforts would unearth …
    Posted by: RAGZ3 days ago1 Point
    You know, I subscribe to Wired, and I like the content, but please answer this question; why am I paying Wired’s comparatively high subscription cost if you’re going to stuff it so full of little ad inserts, that when I open it during my bathroom rit…
    Posted by: jdwright103 days ago1 Point
    This definitely true. It’s a pretty good strategy if you think about it. I just bought a $7 Gillette razor and the refill blades cost me $15!
    Posted by: gdavis951293 days ago1 Point

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