What Is The Internet For?
I liked Chris Dixon’s post on “Search and the Social Graph” because it seemed to reflect some of the same sentiments that I talk about when I talk about strategy. I suppose this likely means that my insights are not so revelatory. I’m okay with that.
The point I take from Chris’s post, which he also discussed when he talks about how it’s better to build a demo than it is to build a powerpoint, is that people talk about thematic web concepts like your social graph slowly replacing Google and search as the mechanism through people navigate the web. That is, links in Twitter and Facebook are more powerful drivers of web traffic, over time, than paid search results on the side of your Google search results page.
The thing I like about Chris’s post is mostly this sentence:
Searches related to news, blog posts, funny videos, etc. are mostly a loss leaders for Google. Google’s real business is selling ads for plane tickets, dvd players, and malpractice lawyers.
What a clarifying, and therefore powerful, statement. You see, all these people talk about the Internet so abstractly. And that abstraction clouds everyone’s vision on reality. And, for businesses, reality is about what people are willing to pay for, repeatedly.
As Chris highlights, the social graph doesn’t seem to really drive, at least not on scale, revenue to companies that make things. And that’s because most of what people trade links about are videos, songs, and news articles. And those news articles are actually funded by adjacency advertising, not dissimilar to paid search. And that doesn’t even work so well.
The problem that, I think, entrepreneurs and VCs need to spend more time discussing and focusing on is less abstract and more tactical. It’s not about the “social graph” per se. Nor is it about “the real-time web”. Nor is it about “semantic search”. The problem is how to figure out what people pay for. If it’s an advertising-driven business model, then you need to be generating actions for your marketers and advertisers that ultimately help them sell stuff. If it’s a direct sales business model, you need to figure out how to get people to open up their wallets, take out their credit cards, and spend some money.
Friends, I know I’m being somewhat glib. But that is basically the end of the story.
If your business doesn’t generate revenue. Then it’s not a business. By definition.
And the problem, as Chris points out, and as I see when I read and hear people talk about important issues like “the real-time web” is that people use the Web for some specific things and they take some very specific actions when they’re on the web. I don’t value the real-time web because the only thing I’ve ever needed “fairly recent” is market-driven information or the news. And I wouldn’t use Twitter to read the news because it’s a morass of crap. And I wouldn’t use Facebook to read the news. Nor would I really use Google. I still continue to use the New York Times, The Washington Post and maybe one or two other blogs.
So, for me, and for most people, the real-time web isn’t an actual problem that needed to be solved. I don’t care what a million people are gossiping about at any one moment. Or at least not in the format that Twitter presents.
Similarly with “semantic search”. I don’t need to structure really human-sounding questions to an AI platform so that it can read my mind. I understand how to use Google given the parameters already in place and I’m decently good at it and fairly pleased with the results. So “semantic search” doesn’t seem to be a real problem and certainly not one I’d pay for.
As we build the next generation of web tools and platforms, I think it behooves us to take a step down from the mountain sometimes, maybe to a peak slightly lower, and think about the actual needs of the people that use the Web, rather than invented constructs that are flimsy, abstract and esoteric. We need to build real businesses for problems that actually exist and that people will pay for.
December 18th, 2009 at 12:52 pm
[...] This post was mentioned on Twitter by Sam Jacobs, Sam Jacobs. Sam Jacobs said: I ask you to ask the question "What is the Internet really for?" http://bit.ly/5xnL80 [...]