A Radical Proposal To Avoid the Mallification of the Web

The rumor is that Facebook will on Monday unveil a fairly full fledged webmail solution.  At the same time Google is working hard on some kind of new social network.  Microsoft too is trying to have email, search, social, etc. all under one roof.  The rationale here seems to be one of wanting to own as much of a user’s experience as possible. 

It is supported by an economic logic in which companies are making lots of money in one area and using that to subsidize other parts of functionality.  Once those pieces of functionality are up and running, they provide additional information about the user, which is more helpful to someone who already has information about that user than it would be to a standalone service (the marginal value of information is super-modular).

I have started to think of this as the “mallification” of the web.  If it happens as currently envisioned by the major players, there will be a handful or fewer malls to choose from.  I hate malls in the real world.  I much prefer making the extra effort to go to my favorite stores wherever they may be than drive to one place where a few great ones are bundled with a whole lot of mediocrity.

The web doesn’t need to be like this.  On the web, each individual service is just a click away and data could flow between services in the cloud.  That would be the basis for a continued vibrant online world full of diversity and innovation in each separate service.

What would it take to create this alternative to web malls?  My radical proposal: a central provider that creates truly shared economics. 

Google, for instance, took one step in this direction with AdSense, but ultimately kept most of the search economics for itself. Instead of building gmail itself, Google could have chosen to let other people build email services and share enough search revenues with those services to make them sustainable.  Now some folks will say immediately that gmail advertising doesn’t monetize well enough to support gmail, let alone third party services.  But that fails to acknowledge the value that Google can potentially derive from information gleaned from within email to the economics of core search.  Put differently, what matters is total value contribution, not contribution within each service.  That should also be the basis for a sharing arrangement with providers.

It will be interesting to see if one of the existing companies is willing to be more radical.  Google and Microsoft are hampered by being public (although if Microsoft had given away economics to the tune that it invested in its own failed initiatives it could have a huge online economy around it now).  Facebook has a potential platform with credits, but so far is pushing in the opposite direction by absorbing areas which would be fertile for third party services (chat, location).  I am not even thinking about Yahoo.  Finally, there is the possibility that someone else gets there, such as Twitter, but they need to first get their own economic engine to really take off.

Of course it is also entirely possible that it is too early for this radical approach.  Maybe we are bound to suffer through a period of malls before we can get to a more open web services economy (a widely available actual cloud computing platform would help a lot).  I for one am hoping we can avoid that interim state.

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Posted: 12th November 2010Comments
Tags:  Google Facebook Microsoft Twitter Malls Services

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