One of the beautiful (and scary) things about the web is how many incredibly smart people you run into out there, and Seth Goldstein of Majestic Research is razor-sharp. Over the last three months, he's been writing a five-part series (well, nine-part, actually, since he had to break up his final essay so all his ideas would fit) on Media Futures.
When you pull it all together, it's a sweeping assessment of where we are and where we're headed online. Consider it a primer in the future of user-generated metadata, socially-constructed media, collaborative content development, and by extension, all consumer-facing online business. (Yeah, he's that good.)
What I particularly like is his five-part alliterative organizing structure, which can by synthesized into a Cliff's Notes version of his thesis:
- AUTOMATA: That's us. Goldstein sees cellular automata, i.e. those self-replicating cells you remember swarming across the screen in the Game of Life, as an apt metaphor for a world of uncounted numbers of self-publishing individuals, generating endless amounts of content and metadata about our behavior.
- ALGORITHM: The next huge, data-crunching challenge everyone's racing to solve is the creation of a "social media computer," built upon an algorithm as elegant and effective as Google's PageRank, that will make use of all that metadata and other "user generated content to automate the production of commercial content."
- APIs: We need new ones--not traditional application program interfaces, that define how software communicates, but ones that define and enable new ways of communicating among people, allowing us to identify peers and make connections through our own metadata.
- ALCHEMY: The "base metals" of "our browsing, clicking, searching and tagging behavior"--our metadata--have the potential to be magically transformed into "precious datastores."
- ARBITRAGE: But to make effective use of these alchemical reactions, entrepreneurial businesses will have to find ways to buy low and sell high. The easiest way to buy low, of course, is to grow your own--to engage a user base who will freely and willingly generate and share their metadata and other useful content.
Short excerpts from seven of the nine essays follow below--the last two have yet to be posted. Watch his site for what promises to be a gripping conclusion to a very thought-provoking series.
- Part 1/5, AUTOMATA, March 21
When you aggregate all of these individual reading and writing agents [i.e. "RSS tools like typepad, flickr, adsense and del.icio.us [that make] it easy for individuals to syndicate their preferences, memories and desires...[and] RSS tracking tools like feedburner [that make] it easy for individuals to track who is paying attention"], it looks more like a landscape of cellular automata than a tradition publishing model. This would seem to be the essence of social media...and social computing, two memes that seem to be growing in influence. When individual decisions such as applying certain tags to pages or photos achieve a broad social consensus, then it as if these tags begin to self replicate which is the essence of automatic behavior...
The concept of cellular automata is useful as a metaphor for next generation Internet content, which is similarly dynamic, member-generated, and excitable. In the next post, I will focus on algorithms, as they transform the automatic social media into business rules and procedures.
- Part 2/5, ALGORITHM, March 23
In the same way that computer scientists 50 years ago focused on the single problem of designing a general purpose computer, there is a similar focus in 2005 among leading Internet service architects: creating a social media computer that leverages user generated content to automate the production of commercial content. In so far as this represents the important problem that the best and brightest of us are looking to solve, then to an extent it is a race for the best algorithm...
The question is, then, whether a PeopleRank [i.e. as opposed to Google's PageRank] algorithm that uses community driven tags as its input, could do to About.com, Gawker Media, and Weblogs what Google did to Alta Vista, namely deliver a superior end-user experience that requires only incremental server bandwidth to scale.
- Part 3/5, APIs, March 28
[A] new kind of API is required, one that enables users to connect and communicate with each other rather than with the information itself. Web services are essentially apertures that refract user driven data towards a specific end...
Virtually all of the major Web 2.0 platforms (GOOG, YHOO, IACI, AMZN, EBAY) recognize how critical it is to engage their users in the act of media production, and therefore are (in different ways) releasing APIs that stream their consumers' meta data. Such data is not simply theirs for redistributing, but rather needs to be the byproduct of some other functionality such as Amazon wishlists, Flickr tags, or EBay auction trends...
...[W]e have still yet to see fully formed businesses leverage these platform APIs and thrive as stand alone entities. These will likely emerge in the next 3-6 months.
In the meantime, the goal was simply to establish the API as a key component of media futures, specifically as the hinge between the algorithm that processes raw human meta data and the moment of alchemy that occurs when you discover something you didn't even know you were looking for, courtesy of some people that you didn't even know that you knew.
- Part 4/5, ALCHEMY, April 12
[George] Soros claims that one's understanding of a situation changes the situation, and that the secret to his investing success was understanding his (and other investors') impact on what had otherwise been seen to be efficient markets. This is consistent with what I see happening online, where meta-data (information about information) is creating significant economic value, from the many millions of Google and Overture keywords to the emerging class of Flickr, Del.icio.us and other tag-driven systems. Our browsing, clicking, searching and tagging behavior are the base metals which alchemists like [del.icio.us founder] Josh [Schachter] are turning into precious datastores.
What is del.icio.us after all but the traces of what people do with their time? These memory links, and the tags that go with them, are themselves a form of media. For me, this is the essence of Internet alchemy, and relates the complementary functions of automata, algorithms and APIs. It is also the reason why I took to Josh, encouraged him to take friendly venture money so that he could quit his job, and recently became involved in del.icio.us as an angel investor and advisor.
Jay [an unnamed entrepreneur] is the quintessential media arbitrageur. His friendly presence puts both publishers and advertisers at ease, and they are happy to provide him with valuable information flow. This charisma belies a dispassionate logic for understanding how to use cheap media to generate expensive transactions. It is this strange combination of the extremely human (ie ability to scale and maintain relationships with other people) and the extremely technical (ie ability to establish fully accountable performance based advertising networks) that exemplifies arbitrage today on the Internet.
- Part 5/5, ARBITRAGE: II. Crisis, May 17
Google is the central actor in an Internet Advertising action adventure flick that began in 2002 with the dawn of Overture and AdWords into billion-dollar businesses, and came of age in Overture's acquisition by Yahoo! and Google's celebrated IPO.
Now the question is, “what might be the equivalent of the 1998 bond market crisis for Internet media?"
I believe that the combination of Google’s massive volume of search queries, combined with the manner in which it hides its metrics, gives it an unfair advantage over potential competitors...
And so, the question emerges as to when might the justice department decide to investigate Google for anti-competitive practices. Should this happen, the combination of Google’s misfit clunkiness at being open, combined with the uncertainty of legal proceedings would introduce enormous volatility into its stock. It would be mild if Google were only to suffer a 50 point drop, followed by a perhaps even larger gain. We could assume that such extremes would whip the Nasdaq into a frenzy and, for a moment, challenge our own unconscious addiction to the populist, conservative and above all white Google search interface.
It is ironic how personal technology and the Internet continues to be represented culturally as a source of control; we are everywhere reminded that our browser gives us the ability to establish order on a world of constantly changing information. When we search for something, we are driving the process of personalized information retrieval
But on the other side of the mirror, we are being watched. Our queries are being mapped legitimately by companies looking to contact us... [O]ur future purchases, our future media consumption, our lifetime economic value across hundreds of categories and thousands of companies, are all being calculated in real-time. Not by a single agent, but by multiple agents each trying to evaluate our momentary state of purchase intent in the context of the many monetization levers these advertisers have at their disposal.
As the Internet medium continues to evolve into a sales channel, the price of advertising is becoming mapped algorithmically to probable outcomes. Very little is being left to chance, as even the most ephemeral of creative decisions (color of the car in the banner, the choice of text in the link) are immediately evaluated in terms of click-thru rate and ultimate conversion.