Seeker Blog

Esther Dyson is not easily ignored. Nevertheless, I don’t buy Esther’s concept of “Facebook as the new Google”. Suppose for argument that social-networking-enhanced search is actually useful. If the concept scales to wide adoption the search host is quickly going to require [a] mind-boggling server infrastructure; and [b] the ability to grow that infrastructure exponentially to keep pace with the exponential growth of Internet content. Rarely discussed is the fact that Google is the only net company today who has successfully scaled that technology challenge. E.g., as a trivial example of Google’s wide & deep strategy, by locating some new mega data centers adjacent to major hydro-electric plants [Google is a very large electrical consumer, requiring both reliable power, and low prices per kWhr].

While the big news in the online world focuses on Google, Yahoo and Microsoft, a more profound revolution is taking place on the online social networks: The discussion about privacy is changing as users take control over their own online data. While they spread their Web presence, these users are not looking for privacy, but for recognition as individuals — whether by friends or vendors. This will eventually change the whole world of advertising.

The current online-advertising model will become less effective, even as it gets increasingly sophisticated. New players are emerging to devalue the spaces that the ad giants are currently fighting over. Companies you’ve never heard of called NebuAd, Project Rialto, Phorm, Frontporch and Adzilla are pitching tools to Internet service providers that will enable them to track users and show them relevant ads. This approach (called behavioral targeting and already in service by ad networks that track users through so-called tracking cookies) undercuts traditional online publishers, who employ content to lure users and to sell adjacent ads. Now, the ISPs can sell advertisers direct access to the same users.
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OTOH, it’s a bit cheeky to bet against Dyson, who among other notables was an early investor in both Flickr and del.icio.us. See our earlier post for more background on Esther and her remarkable family.

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