A probably dark future for Facebook Connect

Since the credit crunch and the crisis in economy started to show their ugly heads, pessimistic scenarios of doom and gloom circulated the Internet. VCs signaled their own mayday, advising their customers to save cash, lay low and accept a possible M&A in order to survive. In other words, they’re telling smaller companies that if they want to stay in business, they better sell themselves to the bigger ones if such an opportunity is raised.

But this doesn’t apply only to small companies. The lack of credit in the world makes value not so “valuable” without cash to back it up, and it has been said that even web start-ups that have been uber successful (like Twitter) could be in danger if they don’t find a way to monetize soon. Considering the hard times that are coming, that’s true. When all cash is burnt, the company either goes to the deadpool, or sells itself to someone with loads of cash.

Facebook faces a monetization problem as well. It may be the biggest social network in the world today (at least in terms of users and visits), yet it had failed to find a way to monetize since not so many people care to click on its ads. However, Facebook does have a lot of cash right now, a part of which (a mere $240 million) comes from investments by Microsoft. But why did Microsoft want to invest in Facebook? I think it was because of fear; fear that Google would, eventually, buy Facebook.

Facebook Connect vs. Open Social

The reason Google would want to buy Facebook is simple: to make it support Open Social, instead of Facebook’s own proprietary Connect. Both of these APIs make it possible to share information from one social network to another. For example, you could use your Facebook account (you have one, right?) to connect to another social network with the same credentials, access your friends list and even do stuff there that would inform Facebook to post a story on your wall.

Facebook Connect

This is so powerful, that it could even merge with OpenID. For example, LivePoker, an iPhone app, lets you play poker online through the device by logging into the system using your Facebook account. Then, you can play against other Facebook users or your friends if they’re online. This way, you don’t have to create yet another account for the LivePoker service, and you’re carrying with you all the social information you’ve so deliberately crafted in Facebook to present yourself online. It’s a huge thing, and Google definitely lusts for it.

All data should be open and accessible

Google wants everything to be open. They’re big supporters of openness. Android is an open API, and they managed to get the FCC to support openness in the wireless spectrum. They simply want all data to be accessible, so they can index it and use it. Google wants to have access to all information there is out there in the world; they want to know everything about anything and they have an infrastructure to support this. If Facebook goes against this openness and insists on using their own proprietary API for their own good, Google has no other solution than to acquire them and force them to open up and conform to Open Social.

Considering this, Microsoft did a good thing investing in the popular social network, thus extending its runway and delaying such an acquisition. Otherwise, Mark Zuckerberg and the rest of the board could quite probably find themselves considering an M&A with Google when the times are dark and the cash has gone, which would happen if they don’t find a way to monetize. Maybe they will, maybe they won’t, but at least for now they have time to try and find such a solution.

The dreaded Google – Facebook M&A

Future Facebook

Why do I speak of such an M&A as dreadful? Because it will probably be one of the most big-brother-ish things we’ll see in the years to come. When everything will be social and there will hardly be any human in the western civilization without an online presence, when all the major and minor web services will be supporting open APIs to exchange information (that is, our personal data) and our social network account will become the One Universal ID, I’d be afraid of Google claiming this data for their own use. That is simply going to be too much power in one company’s hands.

Think about it this way: they’ll be crawling and index the whole Web as well as bazillions of e-mail messages from millions of users (Gmail & Google Apps), they’ll be running major web services on their infrastructure (Google App Engine), they’ll have mapped the whole globe (Google Maps & Google Earth) and they’ll have created a “cloud” that would pretty much know everything about anything (like I said in another post that’s what Google officially claim as their goal). I wouldn’t want them to “own” my One Universal ID credentials as well.

One account. One ID. One company. Scares the bejesus out of me.

Twitter delivers the news faster than the media

There are still enough people that don’t get what all this social networking/microblogging thing is about. I was one of them, when I first learned about Twitter when it launched. I mean, why should I inform the public of what I am doing? Why is it so important to post details about my (probably meaningless to others) daily activities? Heck, I was even negative to blogs at first. Social networks, I deterred from for some time. But Twitter? Come on, that’s absurd!

But after some time, I realised that focused people posting articles about their domain of expertise was a good thing and blogging is not useless after all. The social stuff was harder to grasp though; I admit that I wasn’t an early adopter to Facebook, MySpace or the rest of the social networks. For quite some time, I stayed away from them, but then I started to realize the potential that comes from connecting to people. There’s no better advertising than virally spreading the news to your connections, and they forward it to theirs and so on. It’s fun too.

But Twitter? Posting status updates in 140 characters? Why go back to a primitive Internet-style SMS when we’ve got computers, and Internet, social networks- I couldn’t get it. But as in all things, it’s more probable to grasp the idea of something if you participate in it, rather than judging as an observer.

The power of microblogging

Had it been only for status updates, I’d still consider it silly, but it turned out that Twitter evolved into the so-called micro-blogging platform which has potential and momentum. Messages are instant, short (hence easier to read), spread around all followers immediately, it allows personal communication and it’s accessible on-the-go from virtually anywhere on Earth there’s cell signal. If you provide useful content, people follow you and get informed; you can evangelize and promote your stuff and services; you can get the news first.

Get the news first? There’s no “breaking news” sessions in Twitter, that’s only in TV. But the latest tragic incidents in India, showcase (in a very sad way) that the microblogging platform is not only a news source, but the news come faster than traditional media. At least that’s what Arrington claims, and I agree with him. In fact, when I read about the Mumbai attacks on Twitter messages from the people I follow, I asked my wife “hey what’s going on in India?” but she didn’t know, even though she was on the TV.

Uses and abuses of the microblogging wonder

Twitter may not be the most credible news source out there (but is the media credible anyway?) since people can always lie. But when many people seem to claim the same thing and it reaches a critical mass, it becomes a reality. When, for example, you witness the public timeline and everybody’s talking about the attacks, you can’t claim it’s false news, there’s no way all these people would lie at the same time.

But there are cases where people could lie. Think of it, even before Twitter and the Internet, rumors still spread fast and many times they were proven wrong, but it would take longer to span the globe. Today, with the power of the interconnection of billions of people, a malevolent rumor can spread like wildfire affecting millions of people before they get a chance to distrust it. For example, imagine how some fake news could impact the stock market, if some “insider” claimed something “hot” is going on. I bet that a hoax about Steve Job’s heart attack originating from a paramedic (perhaps with a photo attachment of poor Steve in the ambulance) and then being confirmed by numerous other witnesses and insiders, could travel faster than an official statement of Apple about the matter (and Apple is indeed a bit slow when it comes to press releases).

When a critical mass of people lie, that lie becomes a reality. It may not be true, but all that matters is what people believe to be true.

Power to the people

Traditionally, the power of information was a privilege of the media, so when people begin to claim back some part of it, it sure is not a small thing. De-centralizing the news sources and spreading it to individuals around the globe could potentially harm long-standing balances in society. People-casting is radically different from news media, yet quite powerful. The strange thing with people is that there are too many of us and almost totally uncoordinated, yet from within this soup of (mostly useless) information, patterns begin to emerge and it’s not at all improbable for a small piece of information to cause a “hurricane” in a worldwide scale. It’s chaotic, and it can’t be controlled.

I’m pretty sure more and more power will come to the hands of individuals and if the media don’t jump on this wagon they’ll probably regret it. But perhaps the most thrilling aspect of this interconnected information chaos is how it can be (ab)used to deliberately inject information into the network. Will the people maintain the power of information-anarchy, or are they simply going to be the medium through which the same old powers are going to rule the world?

The end of online piracy and the Internet as we know it

Ah, the Internet! A huge network of interconnected computers allowing users to exchange information of all kinds. It started with chunks of text, e-mail and simple web pages, but as connection lines improved and end-users got more bandwidth (speed) available, file-sharing became a reality: a haven of all the world’s digital riches, be it music, movies or software. That obscure indie band only a dozen of people know of? You can find it’s latest album online, for free. And the latest movies too, even before they hit the screens, for free as well. And if you ever need some kind of software, you don’t have to spend a penny; it’s available on the Internet at no cost.

Everything for free. Of course it’s illegal, but it’s free. File-sharing and peer-to-peer technologies have made this true: Napster, Kazaa, AudioGalaxy, Gnutella, Limewire, Soulseek are only a few of the apps and technologies that enabled users to exchange copyrighted information for free throughout the years. Online piracy increases exponentially, and the big guys (e.g. MPAA, IFPI etc) can do little to stop it. The latest and greatest in file-sharing technology, BitTorrent, has been characterized as a “hydra”, since whenever a file-sharing community is shut down, two or more new ones come into existence.

Let’s face it, people will always share copyrighted material with each other because it saves them money. And it does save a lot of money! For example, if a proud iPod owner would ever want to fill her 160GB iPod Classic with music she had bought online, it would cost her tens of thousands of dollars. But online piracy makes it easier for teens and everyday people who are not millionaires to enjoy thousands of songs in their music devices at no cost. Getting it illegally off the Internet is free, easy and makes the user’s life easier, but the artists and the record companies don’t see it this way. And in the end, they will find a way to win this battle, at least momentarily.

The only way to defeat online piracy

But how can the copyright holders win this battle? it’s easy: by charging the users. That’s right, charge the users for downloading illegal copies of copyrighted work, and if it’s possible, charge them more than the actual cost of buying a legitimate copy of the latest album, or a new movie, or some kind of software. That would put an end to online piracy, and it will. But how can you charge a computer user for downloading something from another user? How could the record companies achieve this?

The record companies cannot do this, but your Internet Service Provider (ISP) can. The Internet has given birth to online piracy because information exchange is “free”; you only pay a small fee to your ISP to gain unlimited access to the Internet and then you are able to download enormous amounts of data, be it legal or illegal — your ISP doesn’t care. But this is about to change since it will benefit both ISP’s and copyright holders, and the moment they realize that a deal is underway that will make them more profitable, the “free” era of the Internet will be over. And we’ll be the lucky ones to have witnessed this free era.

Today, as more greedy users around the world use peer-to-peer technologies to share files, the amount of traffic generated by file-sharing is huge, often utilizing all of a network’s available bandwidth and resources. Since when will ISP’s let their users save tens of thousands of dollars by not buying the stuff they want, but in the same time forcing the ISP’s themselves to spend tens of thousand of dollars to upgrade and improve their networks since there’s high demand for more bandwidth? Not for long, I predict. Especially when the copyright holders will make a deal with them to share profit.

In the near future, your Internet subscription will come with a different policy. You’ll still pay a fee to access the Internet and have unlimited data access to normal or featured content for fair use. But when you use the network for file-sharing, distribution of copyright content, illegal material or other uses, you will be charged for it, by the volume of traffic you create. The key phrases in the last sentence are “fair use”, “featured content” and “other uses”. Essentially, the policy that your ISP will enforce you will read “as long as you use our network to access the Internet for web browsing, e-mail and other things we consider to be fair use, we will not charge you; but if you download copyrighted stuff or do anything else we don’t approve, you will have to pay for every byte of that traffic”.

This is already happening for Internet access over your mobile phone. Do you think you can use your mobile phone’s GPRS access with an unlimited data plan to download the latest and greatest TV shows to your computer for free? Think again! Ian, a poor guy, had that idea, but ended up owing Vodafone 27,000 pounds. This is a true story. Now imagine the same thing applied to all Internet access, be it DSL or cable and you’re getting the idea.

ISP’s are already getting into the game of assisting the battle against online piracy. But filtering data will not offer much, users will utilize cryptography and other means to still cloak their illegal activities. ISP’s and copyright holders will realize that people are going to stop sharing content only at the moment it stops being free. This will stop people from stealing away copyrighted content, force them to buy the stuff they want, and still make ISP’s more profitable by charging those foolish enough to insist on file-sharing in hope that they won’t get caught.

Featured content will still cost nothing to download. This means that, for example, you’ll be able to pay iTunes Music Store the amount of 9,99 euros and download a music album without paying anything to your ISP, since it’s featured content, traffic from a known, legal source. But if you choose to download an illegal copy of the album from, say, BitTorrent, and are charged at a rate of 0.001 euros / kB you’ll end up paying the same amount of money, if not more, and still face the possibility of getting caught and go to jail for your crime. So which option would you choose?

Now think of this: iTunes Music Store drops it’s prices so you get an album for 8 euros. In the same time, ISP’s charge more than 0.001 euro / kB for traffic that is not “fair use”, so downloading the album will cost you 12 euros. It will be cheaper to buy a legitimate copy than download it illegally. The moment this happens, online piracy will die. And the organizations with the fancy acronyms will grin and celebrate their victory, but it will not last long.

The future of the Internet

It is obvious that this will be the end of the Internet as we know it. The Network that started as a military project and soon became the ultimate medium for telecommunications around the globe, will not be as free as it is today. Downloading stuff will cost you bucks. In the years to come, our times will be remembered as those days of the “free” Internet, those times that people were able to download anything for free and we’ll be nostalgically write about it in our future blogs, or whatever blogs will evolve to.

But people will not give up. As soon as the new policies will apply, people will find other means of communicating to each other for free by not using the Internet. Ad-hoc, peer-to-peer wireless networks spanning entire cities already exist and you can join such a network just by placing your wireless access point outside in order to have a good signal. Computer users will start connecting to each other using WiFi, forming a new network that belongs to the users, not ISP’s, since the air is (still) free. This is already happening, but in the future it will be the only way to exchange information for free, so more and more users will join these networks.

More and more of these wireless “darknets” will form, closed communities run by the users, for the users, screening new entries in order to keep the record companies, ISP’s, spies and law enforcement officers away from witnessing the distribution of illegally copied data, thus creating a new haven of free file-sharing. There will still be a need for these networks to become interconnected to each other, and they will do so, by utilizing ground networks that allow them to do so. University networks, for example, or ISPs of “questionable ethics” that will allow the free flow of data for very low monthly fees. A new Network, more chaotic and decentralized than the current Internet that will form a new community for users and a new market for businesses.

And when the “Airnet” of the future will become a reality, copyright holders and organizations will have to defeat online piracy again. Will they be able to regulate wireless communications, or charge for using the air as a medium to transmit signals? Who knows what will happen when the air will become so congested by all the information travelling through it. That is, if there’s still air to breathe and we hadn’t destroyed Earth’s atmosphere by continuing to severely pollute our planet…

We are, indeed, living in interesting times.

Updates

[Jan 16, 2008] Ars Technica recently published an article discussing that filtering is about to become a reality in College networks as well as ISPs, while today it discusses about a debate that takes place on the New York Times, about whether ISPs should be forced to play a vital part in fighting piracy by filtering content, and how this idea is probably going to fail.

[Jan 17, 2008] Ars Technica today writes about a leaked memo indicating that Time Warner Cable is about to apply bandwidth caps to it’s users, initially on a trial basis. I believe that this is a first step towards the scheme I predict in this article, if it finally becomes true. When users will become frustrated about reaching the specified bandwidth caps, they may be given the option to pay extra for more bandwidth, or engage a different policy that will bill them according to the “kind” of traffic they create.

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