Friday, June 03, 2005

The Businessperson's Guide to the Web: Past, Present & Future

[Please tag: Web2.0, Internet, future, tagging, digitalDJ]

The future of business is increasingly intertwined with the future of the Web. Yet, most businesspeople slip into a coma when they hear techie-speak about XML, RSS, BFD. So, I thought it would be helpful to provide a non-technical review of where the Web is heading. Unfortunately, you need a little context on where the Web came from, to better understand where it is going. So, here it is, laid out much like Charles Dickens' A Christmas Carol:

The Web - Past:
"Those who ignore history are doomed to repeat it." --George Santayana

After Al Gore invented the Internet (Ha!), a guy named Tim Berners-Lee realized that we could use it to publish stuff in a machine-independent way (def. so that any machine could display it, Mac, PC, Altair, etc.). So he invented HTML (HyperText Markup Language) and some other stuff I won’t bore you with. It was really simple, it basically labeled stuff bold, italic, etc. and it also allowed links from one page to another. Thus the World Wide Web (AKA Web) was born along with that annoying www thing for webpages.

Other guys built simple applications to view all this stuff (see Netscape, see Microsoft, don’t see Netscape anymore). The Web became such a big deal and it's simple enough that now my Mom uses it to Google me (not always a good thing).

The net result of all this is that we have freed the pages from books, brochures, magazines, and other stuff to put them up on the Web where anyone can read them. Very cool stuff. As the number of websites grew, we realized that finding our way through this mess was going to be a royal pain in the ass. So a couple of guys at Stanford started keeping a categorized list of websites. This becomes Yahoo, founders David and Jerry become multi-billionaires and we become jealous that we didn't invest early enough.

Important Point #1: The Web is a mess, and making sense of it is worth big money!

Problem: Yahoo cannot keep up with the growth of the content on the Web. So search engines evolve. The search engines use machines to automatically surf the Web, so they can gather information a lot faster than a bunch of sleep deprived Yahooligans. Search engines like Infoseek, Excite, etc. make their founders rich.

Important Point #2: (a) There is so much stuff out there that even big rich Yahoo cannot manually make sense of it all. (b) Helping people find information on the Web is still worth big money.

Problem: As the amount of stuff grows, search engines lose their value because every search results in 100,000+ webpages, and you have to sift through it all to make sense. So Google figures out that they should not only index the Web, they should also figure out how many websites link TO each webpage. The idea is that the more links there are to a particular webpage, the more interesting it must be. This enabled Google to rank its search results more effectively. This made Google so popular they were able to give Wall Street the finger and IPO their way (Dutch Auction), making yet more billionaires.

Important Point #3: Provide people with a better way to find relevant information (search plus ranking) and you'll be rich enough to buy a small country. Do you see a pattern evolving here?

Problem: The amount of stuff on the web continues to grow and even with ranked search, we need to be able to better make sense of it all.

The Web – Present:
"In order to figure out where you are going, you must first understand where you are"

The Web liberated the text from books, brochures, magazines and more and put it all on the web where we can search for it. Now you can search for any term or phrase and get millions of page links. Then you can sift through this to find something of value.

Problem: Wouldn’t it be great if we could get people to add more value in terms of context and ratings? Clearly Google’s counting the links to pages helps with ranking popularity. The problem is that an older webpage may have more links to it than a really interesting new article. We’ve found that no one company, not even Yahoo, can categorize the entire web. So like the Dewey Decimal Classification, we turned to the users to add value.

1. Open Directory Project: Instead of relying on Yahoo employees to categorize the ever-expanding Web, some smart folks figured they would create a community-edited directory. At this point 68,375 people have edited this directory (Yahoo's total employment is about 1/10 of this number).

2. Wikipedia: What the Open Directory Project did for the directory, the Wikipedia did to the encyclopedia. It is a Web-based free encyclopedia where tens of thousands of users write individual articles and link to other applicable Webpages.

3. Tagging: Isn’t that what punks with spray paint do to walls, trains and buses? Yes. But on the web it means people adding their personal notes to webpages. For example, you see a Webpage about word-of-mouth marketing that mentions Gmail, you tag it with the words "WOM", "Marketing" and "Gmail". Later when you have forgotten the address of this webpage, you can easily find it by searching your personal tags using any of the key words. More importantly, you can see what other people are tagging. This is important because is provides us a window into what the aggregate group finds interesting on the Web, sort of a list of "what’s hot now" for every category., Spurl and Furl are some of the more popular tagging applications. (BTW, here is a cool application for called scrumptious)

These applications demonstrate that: (a) automated solutions like search are great, but nothing beats context added by humans; (b) the only way to scale the effort of adding context to this mass of information called the Web is to encourage large numbers of users to do it.

Problem: The Web is so filled with content that a combined solution of ranked search and consumer-driven context, while helpful, isn't enough. It may be enough to make a few more billionaires (yet again) but it is by no means the ultimate answer. It is more a partial solution. The problem is that Internet is still about people "surfing" around to find relevant "pages" of information. Wouldn't it be better if your computer could find and process small bits of information, instead of you having to read many pages to extract those tidbits?

The Web – Future:
"The Web liberated pages from books, now we need to liberate information from the webpages" – Mike Hogan (just made that up, you like it?)

A fair amount of the content on the web is generated from databases. These databases store the data in well-labeled and organized fields. For example, you might have clothing, in clothing you have pants, in pants you have jeans, in jeans you have Levis. Then each pair of Levis jeans has a style, size, price, color, etc. When you flatten this out to put it on a webpage, the computer can no longer process that information, instead a user must read it. But more and more, website owners are exposing the original database content as well. This is hugely valuable.

At the same time, you have people using tagging tools to label content. You also have consumer applications that provide users with forms to enter information. This information is then presented in a structured format as well. taken together, this means that there is growing amount of structured information available on the Web.

Big deal, structure, labels, who cares? Well, now that your computer can understand what the data "means" it can do cool stuff with that data. Let me give you an example:

GasBuddy: This is a simple application that allows users to enter the gas and diesel prices at their local gas stations. You can search the data to find cheap gas near you. In essence, this community of users has created a database, meaning the information is all labeled (gas station name, address, gas price per gallon, diesel price per gallon). Pretty cool information.

Google Maps: This is a service that can place structured information on a map. Pretty cool service.

CheapGas: Essentially, this individual mixed the information from GasBuddy with the service from Google Maps, to create a new service. It enables you to search via a map for cheap gas in your area. Extremely cool solution.

Cheap gas is just one example, there are hundreds more. Another good one is HousingMaps that mixes Craigslist information with Google maps. Here is a collection of other cool sites using the Google maps. The point is that as more structured data and services are exposed on the Internet, we will see people mixing various data sources with various services to create new a cool solutions, tens or hundreds of thousands of new solutions. Just as local DJs create mixes of songs, people will create mixes of Internet data and services. The popular ones will take off, creating a life of their own.

The ability to consume structured data and mix it with various cool services is the future of the Internet. As they take off, they will drive a tremendous wave of structured data sources and services to consume them. While your computer can’t read web pages, it can process structured data. As the web becomes more structured, individual computers will start "reading the web" for us and acting on that information, leaving us to make high-level decisions.

How Can You Profit From This?
1. If you provide content on the Web, in addition to the flat webpage version, you should also expose the structured data.

2. Get your users to create structured content. This approach results in more quantity, quality and lower costs.

3. Your content is no longer constrained to your website, in fact it may only be read by computers, so find a business model that addresses this. For example, look beyond banner and text ads (sorry). BTW, if you don’t liberate your content someone else will do it for you.

4. Create simple services that consume data and offer real value.

5. Encourage "digital DJs" to mix your content/services with other content/services to assemble compelling niche solutions.

I realize that this is contrary to everything you've been taught in business school. I'm telling you to essentially give away the crown jewels in terms of content, services, intellectual property. I'm not saying this because I'm an anarchist, but because it is the future. You can try to fight it, but if you do, some 24-year old with a laptop will do it without you. Oh, I guess I should point out that this new wave will undoubtedly create a couple more billionaires just like the previous technology waves...maybe you.