Friday, November 19, 2010


A recent article in the Wall Street Journal highlights the emergence of new internet monopolies around points of control. Strangely, they aren't emerging due to clever positioning, supplier agreements, partnerships or high market entry costs. They are emerging because monopoly is the most effective configuration for delivering user benefit.  A connective system delivers the greatest convenience and perceived benefit when it is universal. For example, the bigger and more connected the social graph, the more powerful it is. Ubiquity is inevitable. The internet operating system is emerging, not as loosely connected competing components, but as ubiquitous infrastructure.

Our power infrastructure is ubiquitous, our roads, the internet itself - all of them connective systems. There is no competition for the internet - what use would an alternative be? Its unconnected value is too low - no matter how brilliant its engineering. If we look at roads: sure, private companies build roads - but they don’t get to choose what side we drive on, what a stop sign looks like, or what the national speed limit is. The universal nature of the road infrastructure is what drives the incredible competition in the auto industry, and the user benefit is enormous. When such platforms are freely available, we reap the greatest benefit from competition. Ubiquitous infrastructure shouldn’t be what we compete for, but what we compete on. Of course, this doesn't stop companies trying to own the platform, and many succeed in doing so for long periods of time. However, without exception, the greater benefit is derived when the platform is the arena for competition, not the subject of it.

There’s an interesting conclusion to be drawn here - Facebook cannot own the social graph any more than Ford can own the road infrastructure. If Ford could control Toyota's access to the road infrastructure, you would expect a situation similar to that between Google and Facebook. Competition would be severely restricted. Facebook has 'won', but only something that will slip inevitably from its grasp. The social graph must be a platform for competition, not the target of it. Anti-competition litigation seems inevitable.

Facebook losing control of the social graph also highlights the ethereal and necessary companion of ubiquitous infrastructure - benevolent governance. Who should administer the social graph for the good of all? It's not something you're likely to get from a corporate monopoly, but something that is going to become increasingly necessary. Terry Jones observes the following when responding to Tim O’Reilly's question ‘Where is the Web 2.0 address book?’:
Relief does not lie in the direction of more applications behind more API’s. It lies instead in allowing related data to co-exist in the same place.’
A call for ubiquitous infrastructure, and the question of governance arises in the article's first comment -
‘But who owns and runs the central datastore? Why should they be trusted? Who foots the bill and how?’
A common shared database would make our lives easier - one might argue, in fact, that the social graph is simply a subset of this.

What we are seeing here is the emergence of new components that belong in the fabric of the web - things that should join HTTP and DNS and perhaps learn lessons from their governance. The social graph and the common database are just the beginning - we are witnessing the formation of the internet operating system - not as a loosely connected set of competing technologies (for that is just the chaotic state prior to equilibrium), but as an emergent, ubiquitous internet infrastructure upon which real competition can thrive. This is not a process that ends - new candidates for inclusion will appear continuously, and it may be the case that the natural emergence of monopolies highlights these candidates for us. The sooner this infrastructure is delivered as an open and level playing field, the sooner we will reap the true rewards of competition in this new age of connectivity.

1 comment:

  1. Don't think its happening? Monopolistic ubiquity -