Google v Facebook is a battle for today’s internet, not the internet of the future

Wired has just published an excellent article on the battle between Facebook and Google.  It covers the key issues concisely and is well worth a read.

However, I think both companies (and possibly Wired) are wrong to think that this is a battle for future of the internet.  Instead it is a battle for today’s internet.  In my view neither Google nor Facebook will win the battle for the future of the internet because both are fighting in the wrong space.  Both organisations are basing their strategies on the assumption that the future lies in an ad-driven, data capture, real estate model of the internet – and this is a 1.0, traditional institutionalised communications model.

Advertising is a creation of the world of traditional institutionalised information.  No one is suggesting that advertising is still not incredibly important – but it is a pot that is shrinking as distribution-based communication itself shrinks.  And while some of it is moving on-line, the on-line opportunity is never going to be as big as the current total pot and ultimately will disappear altogether.

Here’s why.  The world of traditional media (including traditional 1.0 digital media) was one where information was chained to, and shaped by, its means of distribution.  It lived in places (newspapers, books, websites) and you could rent space in these places to distribute messages.  This was also the world of Google, which was designed to trawl these places to  discover information.  It’s why Google was very good at discovery of information, but not (relatively speaking) very good at rating or valuing information.

The first wave of social media (web2.0) emerged because  distribution suddenly became cheap and available to all.  This started to break the dominance that distribution had over content.  Information could start to move about and exist in a number of different places – for example a single blog post could be found in the blog, but also an RSS reader, become an update in Facebook and LinkedIn or any place that allowed an RSS feed.  The information was not shaped by a specific place or means of distribution in the same way as in the past.  It was much more portable and spreadable.  This has meant that processes of information sharing and connectivity have become more important.  These processes are more influential in defining the trust placed in a piece of information that simply the place (institution) where that piece of information originates.  As I have written previously, trust is shifting from institutions to processes.

This is the world of Facebook, a world where information discovery may not be easy as Google but the rating of information is better because of the process of filtering and sharing through a network.

As companies come to terms with the first wave of social media they will realise that they need to switch their investment from buying media (distribution) to making content and managing conversations in order to establish trust and influence.  They will start to realise that the key to influence in the social media lies in the influence of space not place.  This is what will cause the first absolute shrinkage in the amount of advertising revenue available, rather than simply a shift from off- to on-line.

The second, and terminal, shrinkage of the advertising pot that both Google and Facebook still covet, will occur once the next wave of the social media revolution kicks in.  This is when the separation of information from a means of distribution becomes complete, or rather “free” information becomes dominant over captured, institutionalised, information.  There will then be very few places left to sponsor or rent – nowhere for an advertising dollar to live.

This third wave is not yet upon us, but it is not far away.  Twitter is starting to give us clues as to its existance and dynamics.  A Twitter tag is the first example of a space, a property, a thing that exists almost totally independently of a means or place of distribution.  It lives only through processes of search – nowhere else.   This is the reason why Twitter is finding it so hard to monetize – it hasn’t got a piece of lawn that it can allow advertisers to camp-out on.

The economic model for this third wave will be totally different from that which exists now, and which is forming the basis for both the Facebook and Google strategy.  It won’t be ad based.  It will be much closer to an infrastructure, utility or service model.  Facebook may think that its advantage lies in social search based on the fact that people will trust a network of friends more than they trust an institution – and Facebook owns friendship.   Now while this is true, it is worth remembering that until now, when it comes to trust, people have had only two alternatives – trust an institution or trust a friend.  This choice is a product of the Gutenberg world.  There is now a new source of trust which is neither as close as a friend or as remote as an institution.  This source is the Connected Crowd – the vast, powerful and ever shifting network of connectivity that is swirling through time and space (rather than being captured in place).

The elements in this network will never be friends in a Facebook sense.  But, crucially, the processes of connectivity will mean that the trust you can extract from this will be as good, if not better, than that available from individuals you know and trust.  This is because it will combine the penetration and scale of a Google with the trust of a Facebook network.

The players, services, things that will control the world where information is separated from distribution are not yet in existance.  The only thing we know for sure is that power is shifting away from institutions to individuals.  This suggests that the commercial opportunity does not lie in challenging this shift, but in facilitating it.  It may be in providing the tools, services and infrastructure that helps individuals use this power, rather than denying their right to hold it in the first place.  It is certainly not going to be a Google or a Facebook as they are currently constructed.

It is worth remebering that telephone companies first tried to promote their service by influencing what people should say in a phone call.  In fact, astonishingly enough as it now seems, they tried to drive usage away from social chit-chat to serious business usage.  Very soon they realised that the commercial opportunity lay in  facilitating the process of connection (an infrastructure and service model), not in a model that involved owning, controlling or interputing, the content.

15 comments

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  2. Elad Kehat

    Great post. I like your ideas, and they ring true. You just won a new subscriber to your feed.
    Can you point out to some additional reading on your place/space distinction?

    • richardstacy

      Thanks. Not aware of anyone else out there who has focused on the space versus place issue specifically – perhaps because many of the established social media commentators are still attached to places (their blogs, their Twitter, their FriendFeed.

      If you find anything I would be interested in it and keen to get more of a conversation going around this.

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  4. Phil F

    Some very interesting topics there. You seem to be sounding the death knell of my business !! So how do ‘media owners’ work around/with this? or are we a business sector that will cease to even exist?

  5. Obi Tabansi Onyeaso

    I still remember reading your post on the Gutenberg Principle about five times before the significance of your arguments and the implications of the trend hit me. Looking back now, I realize that the full importance of the changes you write about can’t be too simplified. Stated in simplistic terms, maybe, but comprehensively explained, unlikely.

    I would like to recommend that you teach a course on this, or at least make podcasts and or seminar webcasts available.

    Seriously, I think you are the most important writer engaged in examining the social effects of the end of the Gutenberg era.

    Please keep up the flow of profound ideas.

    Thank you.

    Obi Onyeaso

    • richardstacy

      Thank you very much for your kind words.

      I would love to do teach a course in this – if someone would pay me to do it!

      In the meantime you might like to check-out a presentation I have put on slideshare which sort-of summarises my “Gutenberg Thing” http://tinyurl.com/m6wn7c I might try and do some more of these.

      Also check out Clay Shirky – he is the one I would identify as the most important writer in this space.

      R

      • Bill Herring

        Richard, a new fan here, very interesting and thoughtful insights. I’ll enjoy reading your work from this point forward (sorting out if that is that a time or space reference).

        Re: teaching opportunities – check out the Interactive Telecomms Program at New York University at http://itp.nyu.edu/sigs/program/

        Your work aligns with many of the themes and ideas we kicked around there when interactive services were known as videotext…I’ve no idea if they need instructors but I expect your work would be appreciated there.

      • richardstacy

        Thanks Bill,

        If you read all my posts that would be a place thing (the past) If you read only those that correspond to your specific areas of interest, that would be a space thing (the future). However, if you decided that all my posts correspond to your areas of interest, of if you feel ‘Richard Stacy’ is a conversation its its own right, then you could read all my posts yet still qualify as a space thing!

  6. KOTHEA

    Great, well-written article as always.

    I would be interested to hear how you see the evolution of social media differently affecting ‘business to business’ and ‘business to consumer’ organisations.

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