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
retrievalBut 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.