Web 3.0

Back in the mid-nineties when I was running an ISP I was approached by someone who had scrimped and saved a few thousand bucks and asked me if he should invest in Netscape. My reply was simply, "Microsoft is giving away their browser. How is Netscape going to compete with free?" And that settled that. Tens of thousands of people during the first bubble never asked and answered that question, they only heard the buzz and never actually sat down and took a good look at what was really going on.

With that in mind, lets take a look at where the network is right now and where it's heading. I think you'll find no surprises but maybe a few revelations.

We'll start with Google because right now the entire network revolves around this 800lb gorilla. There's a lot Google is doing right, and a lot that it should be doing but isn't. First, if you'll remember a few years back, everyone was wondering what Google was doing buying up all that dark fiber -- basically unused wires between major cities. Well with video.google.com and their recent youtube purchase you can see the handwriting on that wall. Google thinks the future of the net is video on demand and they're right. Google also thinks that they need a lot of bandwidth to pump those videos out so they scooped up all that dark fiber while it was cheap, before the speculators got wind of the things to come.

Of course the telco's know video on demand is where the network is heading as well. They recently pushed congress to break-up network neutrality so they could start their own video services and charge Google for the privilege of competing with them. Network neutrality was NEVER, EVER about putting the hurt on mom and pop web-sites it was all about telcos and cable companies controlling video (and to a lesser extent audio as in voice over IP -- telephones) because that's where the real money is at.

To be honest, all the hundreds of millions the telcos threw at congress to get network neutrality broken up was just wasted money and not just because the fat cats in Washington took the money and then failed to pass the bill the telco's wanted. No, it was wasted because the telcos don't need to break up network neutrality to bust up Google's ambitions.

By 2008 most of the telcos and cable companies will be able to support 8megabit or better connections to the home, but there's no law on the books that says they have to make all that bandwidth available to the consumer. My DSL is 1.5megabits down but if I call my telco and say I'm willing to pay an extra $10.00 a month they'll flip a switch and suddenly I'll be getting nearly 3 megabits. What that means is that all my equipment and my line can do 3 megabits right now, right this second but my rate tier is capping me at 1.5.

And that's the magic bullet for the telcos. They can give me my 1.5 megabit internet connection and with the extra 1.5 that's available to me but which is capped by their network they can pump videos to me on that unused portion with their routers and firewalls ensuring that only their services are using the above cap bandwidth. The bandwidth I'm paying for is still network neutral so everything is still politically correct, the surplus bandwidth I'm not paying for -- well that's the internet toll road the telcos tried to etch into law but didn't have to.

Google is assaulted on another front with news that several major studios are banding together to make their own youtube like portal. They saw how itunes strangled the music industry and they don't want google putting an itune like leash around their pricing ambitions.

All told, video is a huge risk for google and to make it work they're going to have to partner with the telcos and cable companies and studeos to make it all work. And it does have to all work. If google goes in with the studios it's all for naught if they can't pump high-bandwidth video out because the telcos and cable companies aren't giving consumers enough reasonably priced bandwidth to get them.

With that said, Google has positioned themselves to be THE go-to man for both the pipes and the studios. They have terabits of dark fiber they can light up to pump the videos across the country. They have the technical knowhow to push billions of terabits to hungry consumers. And they have the Internet brand name that will allow everything to transition smoothly to web 3.0 (video on demand). Neither Yahoo nor MS are in this position, neither has the fiber they can light up on demand, Yahoo is busy staring at its naval trying to get out of its rutt, and MS is preoccupied with vista. It's all a perfect storm and it will break sometime around 2008.

And the ultimate wild-card in all of this? Over the long term, video is a dying breed. People spend the bulk of their leisure time on the net instead of in front of the tube. And with World of Warcraft captivating millions of people for YEARS by the time Google, the studios, and the telcos and cable co's all get everything sorted out the audience may all be playing world of starcraft or world of zelda.

So what is Google missing? Quite frankly it's missing DIGG. If Google wasn't so pre-occupied with video on demand and so smug about their search they'd realize that DIGG is a human version of their automated ranking system. Google says if a lot of pages link to you then you show up higher in the rankings. The problem is, a lot of good stuff never gets enough links to float through the tens of thousands of pages, and the other problem is there are link farms created by spammers that game the system to no end. DIGG says a page is good when a lot of people view it and agree that it's good. Now the spammers try to game this system as well but the folks at DIGG are getting as good at managing their spammers as Google is at managing theirs.

The way I see it, DIGG is the chocolate to Google's penutbutter. If you put the two systems together you have a near spam-proof way to ensure quality search results. Unfortunately I think this is flying way below Google's radar.

So what's the next big thing for 2007? Just evolutions, not revolutions. 2008 will be the big year, when enough households have enough bandwidth for high-rez video on demand. But if you know the game, watching the players jockey for position should prove entertaining.