Posts about networks

Points to Forbes

I was terribly impressed picking up the Forbes 90th anniversary issue. No stodgy, self-congratulatory looking back there. The entire issue is devoted to “the power of networks.”

And online, they prove they get it by putting up an org-chart wiki asking us all to tell all about the organization of companies we know. They say: “It’s a new way to tap the collective knowledge of our community…” That’s the sort of thing I would have — should have — expected from new-fangled Portfolio, not from old Forbes. Instead, Portfolion gave us a bunch of old-fangled magaziney features. Go figure.

In the network package, Rupert Murdoch (whom I happened to run into on the street in Manhattan today, moments after buying the magazine, and whose confab in Carmel I’m attending in a week . . . who needs a network when you have New York?) says:

Traditional companies are feeling threatened. I say, bring on the changes. . . .

Those of us in so-called old media have also learned the hard way what this new meaning of networking spells for our businesses. Media companies don’t control the conversation anymore, at least not to the extent that we once did. The big hits of the past were often, if not exactly flukes, then at least the beneficiaries of limited options. Of course a film is going to be a success if it’s the only movie available on a Saturday night. Similarly, when three networks divided up a nation of 200 million, life was a lot easier for television executives. And not so very long ago most of the daily newspapers that survived the age of consolidation could count themselves blessed with monopolies in their home cities.

All that has changed. . . .

Companies that take advantage of this new meaning of network and adapt to the expectations of the networked consumer can look forward to a new golden age of media. [T]he future of media is a future of relentless experimentation and innovation, accelerating change, and–for those who embrace the new ways in which consumers are connecting with each other–enormous potential.

YouTube’s Chad Hurley adds:

We are at an unprecedented time in the history of entertainment media. Never before has the opportunity been so great for independent writers and actors, musicians and producers to create compelling content on par with the studios, networks and labels. With easy and affordable access to cameras, editing software and computing power, the playing field has been truly leveled. . . .

YouTube represents the first time media has become truly democratic for both the audience and the content creators.

Continuing this superlativefest, Howard Dean says:

The Internet is the most significant tool for building democracy since the invention of the printing press. People are now easily able to create, discover and connect with networks within hours, anywhere around the globe.

This connectedness is creating a huge shift in power as ordinary citizens decide what’s important and most relevant to them. They can network with like-minded individuals to create a technology-enabled global grassroots movement. . . .

Fundamental trust in your users is the only way to have a successful relationship with them.

That is a revolutionary idea, one that politicians are not particularly comfortable with. But it’s now the reality. The power in campaigns now belongs as much to these shifting networks of committed citizens as it does to the political establishment.

Looking through the wrong end of the wire

There’s a fascinating — and entertainingly pissy, if sometimes obtuse — argument going on over Metcalfe’s Law (which states that the value of a communications network grows exponentially as its number of users grows). On one side are three authors of an article in IEEE Spectrum, who insist that the law was wrong and even dangerous, for it justified the first internet bubble, and they fear it is being used now to inflate a second social bubble. On the other side is Ethernet inventor Bob Metcalfe himself, arguing at VC partner Mike Hirshland’s blog that his law is not only still valid but, when you tie it with Moore’s Law, it leads to the Law of the Long Tail.

And I will argue with them all — not against Metcalfe’s Law but against the way they value networks. The IEEE authors try to tote up the value of a network in terms of who owns it: the market capitalization of companies controlling networks. In other words, they — like telecoms of old — try to value the network at the center. But that is no longer how networks are valued at all. No, now they are valued at the edge. You and I value the networks we choose to connnect to in ways only we can measure. Metcalfe starts down the right path when, as Hirshland summarizes, he argues that with social networks “we need to consider not just the number of users but also the affinity between the members of the network.” Yes, and each network connection we make carries an intangible, personal quality that has direct impact on how much we value those networks and thus how much they are worth as a whole. We tote up our own value in terms like trust, engagement, joy, relevance, excitement, reputation, need, sex, and money. Human networks must be measured on human terms.

Network providers used to try to measure the value we put on networks negatively, in terms of switching costs. That was what AOL counted on for too damned long as they thought it would cost us too much hassle to switch off our AOL email addresses. Ha! But we each value a network positively on what it brings us. That is different for each of us and each of our connections. For example, I see no value, personally, in LinkedIn; it has never done a thing for me but attract a new form of spam, inconvenience, and embarrassment when I don’t link to someone. But for others I know, LinkedIn provides jobs, business, income, reputation; it is damned near invaluable. Similarly, I see little value in MySpace; for middle-aged me, it is merely a curiosity. For others, of course, it gets them songs or gets them laid. Put a price tag on that, if you dare. I see value in my Treo phone because it keeps me connected to anything, anywhere, anytime. I see great value in having a blog in the ‘sphere, for it brings me learning, ego gratification (I admit it), jobs, and money (but no sex).

An important factor in this is openness. The more open the network, the more valuable it is — but the harder it is to own, and thus the harder it is to value in old terms of ownership and market cap. That’s what really argues against the IEEE authors. They are trying to put a corporate value on networks. You can’t. That’s like trying to value air… or the internet. They defy ownership.

Can a network be too open? Of course. Email, one could argue, is too open because it permits spam. It remains valuable only if I gain control over that spam thanks to enabling tools. Usenet was too open and there was no such control, so its value sank to nil. Some wonder whether MySpace will be too open or at least too big: When everyone is your friend, you have no friends. So here we see the value of niches and of communities: the right people in the right relationships. Small is the new big.

Does this argue against Metcalfe? Does it show, as the IEEE guys want to, that the exponential growth in the value of a network does not continue and, indeed, topples? No, the problem is that all these calculations leave out the most important X factor to which Metcalfe alludes: affinity. And affinity is fed by many of those human intangibles I listed above: relevance, emotional connections, convenience, reputation, and on and on. So, I will argue, the value of a network should be calculated with a multiplier, which is the value a network’s members put on it:

Network value = the sum of the value each member of the network places in it.

But, of course, that is incalculable (what, again, is the dollar value of love?).

Does this further argue against Metcalfe that small networks can have more value than big networks? No, because one should value a network as the sum of its networks. We see the internet that way. We also should see the blogosphere that way. This is why I continue to think it is absurd and wrongheaded to analyze the blogosphere on its supposed A-list. The vast majority of people who read blogs never read any of the blogs on that A-for-alleged list. They read and interact with the ones that are meaningful to them. The blogosphere is not the value of the few on top or even of the total but instead of the unlimited connections enabled within. This is also why I see such power in networked journalism: the network is additive.

This is also about the mass of niches. When television as a medium stopped having to serve everyone at once — when cable, VCRs, and now the internet allowed it to serve smaller interests, tastes, and audiences — television as a whole grew; this explosion is far from over. Fewer people watch HBO than NBC but those who do clearly value it more because they pay for it.

And this is about the value of being the right size: I value the Continental President’s Club because everyone in the airport does not belong; if everyone did, its value would fall to nil. This isn’t about snottiness. It is about control.

So all of this leads to my law — everybody has to have a law — which I think I first stated here and have restated ad nauseam.

Jarvis’ Law: Give the people control, and we will use it. The corollary: Don’t give us control, and you will lose us.

The more we control the network at the edge, the more valuable it is to us, and the more valuable it is as a whole, but the harder it is to own and control. Yet that doesn’t stop you from making money. See: Google. It grew by making connections — establishing unlimited networks of information and now advertising — with content and connectivity it did not own or control. See Skype, which didn’t so much grow its own value as deflate the value of its competitors down to their true worth as communications networks stripped of their monopolistic advantages. If you want to talk a bubble, there was none ever bigger than the artificial bubble of the telecommunications companies and their closed networks; open networks have certainly popped that. (See Isenberg’s Law: “Just deliver the bits, stupid.” See also Yochai Benkler’s The Wealth of Networks.)

I think the next valuable network will rise out of helping us find the good stuff in video anywhere — not just on networks and not just on YouTube, anywhere.

But the truly valuable network, the network of networks, the unbreakable bubble of bubbles, will be the one that manages to bring people together wherever we are, not just on MySpace (read: RupertsSpace), not just in Flickr or Del.icio.us, and not even just in the blogosphere, but everywhere. The internet doesn’t need more social networks. The internet is the social network. We have our identities, interests, reputations, relationships, information, and lives here, and we’re adding more every day. The network enabler that manages to help us tie these together to find not just connections or email addresses or information or songs but people — friends, colleagues, teachers, students, partners, lovers — across this open world, that will be the owner of the biggest network of them all: The Google of people.

I’m no mathematician or scientist, so I have to express this in words, but here’s the way I calculate the value of networks:

The Law of Open Networks: The more open a network is, the more control there is at the edges, the more the edges value the network, the more the network is worth.

The business lessons from this: Any choke point of control, via ownership, decreases the value of the network. Enablers increase the value of the network. The network will abhor and find ways around choke points. The network will value enablers and that is the point at which value may be extracted from the network. The value in networks in the open future is not in ownership and control but in enabling others to control.

: And as if all that’s not enough, see also Tom Evslin and Fred Wilson on Reed’s Law — which holds, in Fred’s words, that “if each node of the network was itself a network (a GFN) then the value of the network scales with the exponential of the number of nodes in the network” — and my clumsy efforts to get my head around it here and here. Fred Wilson begs Metcalfe to also tackle Reed. See as well Umair Haque on Google and Reed and on Metcalfe and the edge.

: Here’s Om Malik on Metcalfe.

: Proving that one Hugh cartoon is worth 1,200 of my words:

Parallel lives: media and telecom

I was lucky to get the chance to spend a morning last week at Bell Labs with a few editors and reporters from the Star-Ledger, and I was struck by the many parallels between the telecom and newspaper businesses.

The first and most obvious is the business turmoil each faces as an open, competitive, and distributed world overcomes their legacies as closed, monopolistic, and centralized businesses. In that sense, the telcos are farther along this trail of tears — not yet on the other side of the gorge, but perhaps able to see the bottom — and newspapers know this disruption and uncertainty lie ahead.

But more interesting are the parallels in the future. Telcos saw themselves as technology and distribution companies and newspapers as content and distribution companies. But it turns out they are meant to be networks, connection companies that put people together with the right people and relevant information.

Gee Rittenhouse, Bell Labs’ vp for technology integration, told us that newspapers have an advantage: locality. I agree. In fact, I say it is more than that: Locality is the essence of a newspaper. Sid Ahuja, a vp in charge of software and convergence, had a wonderful perspective about media and place. He talked about his childhood in a village in India that was not connected to the outside by technology. When broadcast radio came along, he said, it made people think outside their villages, as a nation. But now, technology brings us back together in villages, albeit often virtual ones. Newspapers, too, can bring us back to the villages once they don’t have to broadcast to everyone at once in print and can become more local online.

Rittenhouse talked about how telcos now must concentrate not on the plumbing but on the “higher application level.” Translated to newspapers, they need to concentrate not on printing but on enabling people to act. Ahuja, too, talked about the need to look at application networking atop the infrastructure of the internet. Google is such an application, he said. So should newspapers be, as they use technology to help people make connections.

They each talked about relevance and trust as ways to accomplish this for their networks. Ahuja spoke of the need for metrics and systems of trust to raise the value of the network (in, for example, an email network where 60 percent of the messages are spam, are untrusted). Well, won’t it be the job of newspapers to share trust, to find not only the facts and also the correspondents — professional or amateur — to rely on? And that doesn’t just mean editors deciding who and what are trustworthy; in lab speak, that won’t scale. They need to build rules engines and content handlers to make this happen, Ahuja said. And to do that, they must learn from the people, from the network. It means helping people to share trust among themselves. This is why both industries are trying to figure out how to work with social networks.

Bell Labs, of course, has learned how to innovate in an open-source world. They invented Unix there and saw its value increase with the contributions of people. Similarly, newspapers must find open ways to work with citizen journalists. [See also yesterday’s discussion at the hyperlinked society conference on the competitive, complementary, or destructive — take your pick — relationship of amateurs to professionals.]

Finally, from a business perspective, Bell Labs in particular has had to find new efficiencies as they downsized while, of course, continuing to innovate and invest. That is precisely what newspapers must do. When I last visited there many years ago, the pride in pure research was like that which I saw at the MIT Media Lab: almost a determination not to be practical. That has changed at both institutions, I hear. At Bell Labs, the scientists talked about how happy they are to both work in the long-term — in pure research without immediate business application or impact — and to work on current projects that bring their work to the market and give them feedback as a result. There is a new practicality and from what I could see, it’s energizing. In my last parallel, I’ll say that’s what news organizations must do as well: For too long, editorial staffs stood apart from the market and I say the market will give them the feedback they need. Bell Labs is doing this by reviewing the business potential of ideas and setting up incubators where mistakes and learning can happen apart from the risk-killers of big business. News organizations need to incubate new ideas, fail at it sometimes, and then bring the best to market.

The rest of the day was spent on higher science and even this had analogues in the media world. One scientist has studied how spiders make webs to learn how to improve networks. To way oversimplify the work, one lesson learned is that spiders make local measurements to get global information. Isn’t that what happens when Google, Flickr, or Del.icio.us gets each of us to make local measurements, and that creates global information? Other scientists talked about quantum computing; see how I inserted this into Saul Hansel’s description of media as quantum mechanics yesterday.

There is good news in all this. We all sensed an impressive new energy and enthusiasm at Bell Labs. We walked through the halls where so many brilliant people invented so much incredible technology and some of the laboratories were empty except for stacks of old cabinets and desks. It’s smaller now. So will news organizations be. But Bell Labs has found ways to innovate, invent, and adapt to a new world. So must newspapers.

Bassackwards TV

ABC, CBS, NBC, Fox, Universal, Paramount, and Disney are suing Cablevision in an effort to stop them from offering a DVR in the cloud — that is, from recording and serving shows on-demand not on a TiVoesque device in the home but on a server that lets us — the viewers, customers, former prisoners of network schedules — watch what we paid for from anywhere in the house.

Twits and fools. It has to be a pretty dumb and dorky bunch that can get me to side with my cable company!

But rather than trying to fight our proven desire to watch what we want to watch when, how, and where we want, the networks should be embracing it. The smart network will see this as another way to get more shows recorded and thus watched. They will recognize that there is no real difference — only an attempt at a legal one — between us recording a show on your VCR (if you still have one) or DVR (the TiVoish thing) or on someone else’s server. In fact, by recording the shows up in the cable cloud, we’re less likely to be able to copy and distribute them. The networks might have argued that Cablevision was just recording everything and serving it up at will — which wouldn’t be a bad idea at all — but to get around that, the cable system is, quite inefficiently, recording the same show separately for every customer who wants to. The networks are arguing that this is competition with their on-demand strategy. They should see it as part of their strategy.

You’re just not going to be able to make a business anymore on the backs of stopping people from doing what they want to do. That was the old network model. In the new network model, you recognize that we’re in control and if you do that — if you embrace every way you can find to distribute and promote your shows — then you might survive. Yes, the world has turned upside down. Figure it out.

Dancing with the FSBO devil

Tribune Company just bought ForSaleByOwner.com. That’s a bigger deal than it may appear in the rearview mirror.

When I worked in newspaper companies, I quickly learned that FSBO was a dirty word that made publishers sweat. On the one hand, they wanted all those by-owner ads; they needed to be seen as the marketplace for homes. But on the other hand, the Realtors who paid the big bills hated by-owner ads; their lost customers were their competition. So publishers always danced a delicate two-step, trying hard not to promote the FSBO ads even as they counted the bucks from them. The terrible irony is that the real customers — home sellers — were treated like caged animals by both Realtors and newspapers.

But, of course, the cages are gone and the first to escape were the Realtors themselves. When the web came along, real estate agents realized they could deal directly with customers and no longer needed newspapers to create the marketplace. In fact, newspapers realized that they needed the Realtors’ listings for their own online sites — ads became content — and so the Realtors still ended up holding publishers by their delicates. FSBO was still a dirty word.

I saw this coming a decade ago and argued that newspaper companies should go into the real estate business themselves, becoming brokers to get listings into the closed multiple listing services and putting buyer and seller together directly because the Realtors would inevitably abandon papers. I thought I was going to be fired for speaking such heresy.

But now Tribune is going into the FSBO business.

Isn’t it fascinating how desperate companies are now willing to piss off the channels of sales, distribution, and revenue they so coddled and feared for so many year: ABC tells its affiliates to lump it as it distributes directly to consumers; Warner Brothers tells its network to lump it as it distributes around networks; and Tribune tells its Realtor-advertisers to lump it as it enables sellers to avoid Realtors. The question is whether they spent too long coddling the middlemen and forgetting who the real customer was all along.

Everybody’s a network, continued

Proving the point that the future of media is not distribution, it’s aggregation, TiVo announced today that it had recruited critics, magazine editors, and such to recommend TV shows — to create ad hoc networks, in other words. This cuts across and devalues the old networks; it unbundles and then rebundles them. The magazines are doing it for free because it promotes them and, they hope, their ability to find the good stuff for you: to aggregate. The next step for TiVo should be to have the people become guru guides for each other. Then I could subscribe not just to your blog and blogroll but also to your TV network.

BBC: the open-source network

This week’s Media Guardian column is an open letter to Mark Thompson, head of the BCC, arguing that the beeb shouldn’t think as a competitor to big media but as a laboratory for innovation. (Here it is without registration required.) Excerpt:

The BBC can become the grand laboratory of media. For because of those licence fees, you are in a better position than any organisation anywhere to think generously, to share knowledge and audience – and thus revenue and support – with your media confreres. More important, you can afford to make mistakes. You can try to figure out how to let the people pass around your shows, how to distribute information and entertainment to new devices, and how to gather and share content from the public in new ways, and you can stumble along the way without risking shareholder revolts. The problem is, of course, that you are now facing a revolt of media moguls, instead. So you need to demonstrate that Auntie comes in peace, that you will involve them in your Creative Future, understanding their needs and sharing your answers. For the truth is that the news and media industries desperately need reinvention, they need to benefit from your experimentation and innovation, so long as you are open with your lessons.

Right after that went up, a BBC friend pointed me to wonderful thinking from Azeem Azhar two years ago proposing details of how to manage an open-source BBC with a BBC Public License (see his own site as well). Excerpt:

The internet, then, is where re-invention of the public service principle can begin.

Under the BPL, the BBC’s internet content, for example, would be available for third parties to access and syndicate. A non-commercial user, such as a charity Web site, could put up a BBC news feed free.

Under the BPL, the BBC’s software code would be freely available. Development for certain types of projects would be done publicly, using an open source framework.

Everybody’s a network

In the future of media, which is now, everybody is a network. In the past, networks were defined by control of content or distribution. But now, you can’t own all distribution and content is controlled where it’s created. So, I wonder, where’s the value and where’s the money in the fully networked world?

What is a network now? Your friend pointing you to something to read or watch is a network. The collection of people putting a YouTube video on their blogs makes a network. BlogAds bringing together 800 blogs for an MSNBC.com ad buy is a network. When you subscribe to a collection of feeds, or when you publish up a blogroll, or when you put a tag on your blog post, or when you use a Flickr tag that others use, you are a network.

Networks are about sharing now; they used to be about control. Networks are two-way; they used to be one-way. Networks are about aggregation more than distribution; they are about finding and being found. Networks are now open while, by their very definition, they used to be closed. You join networks and leave them them at will; you can join any number of networks at once and content can be found via any number of networks, there is no practical limit. Networks used to be static. Now networks are fluid.

For us, the people formerly known as consumers, this is a better world. We can find the content we want from anywhere by relying on networks we trust because we know them more intimately and they even know us; we are no longer a one-size-fits all mass. For content producers, which is any of us now, it’s also better, for the barrier to entry — and to the public — is destroyed. And for content itself, it’s better because the good stuff can be found, amended, corrected; it can live longer and live in context.

But what about the networks themselves? Where is the value in networks now? Where is the money?

:::

The old networks are hosed and they are finally realizing that. Suddenly, the dominoes are tumbling, all at once. We all know the latest signs:

ABC pissed off its old channels of distribution — broadcast affiliates, cable system operators, and retailers — by putting up its shows on iTunes and online. Umair Haque says they didn’t go far enough and that’s true, but I say this journey begins with a single step and ABC’s first step was a doozie.

Warner Brothers, in turn, is willing to piss off its channels of distribution — namey, networks like ABC — by doing a deal to sell shows directly to consumers via Bittorrent. Who needs networks?

At the same time, Ad Age reports that Bolt found “only one in four 12- to 34-year-olds can name all four major broadcast networks: ABC, NBC, CBS and Fox.” I tried that experiment at home with my teen son and he couldn’t name them, either (“uh, ABC… NBC… CNN?”). My preteen daughter has no idea what broadcast is. The power of the networks as distribution platforms and brands is diminishing fast.

On the business side, the old networks have no end of new competition. The scarcity economy is over; networks cannot continue to raise their rates even as their audiences shrink, because they no longer control the clock; there is always somewhere else to reach audiences — somewhere more efficienct and less expensive, by the way. The upfront buying season for commercials is going on now and the only way the networks can save themselves from the inevitable shrinkage Warren Buffett predicts for newspapers is by coming up with blockbusters. But as Umair Haque points out often, the blockbuster economy is not a longterm winner and it is getting riskier and riskier. See also Seth Godin: “If your marketing strategy requires you to hit #1 in order to succeed, you probably need a new marketing strategy.”

On the “consumer” side, the people formerly known as viewers have taken control of what, when, and how they watch and they do it without commercials.

And of course, the networks face no end of competitors in content, as well. Rocketboom now has twice the audience of many cable news shows because the stranglehold the networks had on distribution and audience is over. The audience is on stage. Your customers are your competitors.

Or maybe not. The smart network response to all this is to liquify. You let your stuff be found anywhere, in any medium and any network. You let your public distribute for you (see Jon Stewart’s Crossfire rant). Most important — and this is where Umair said ABC should have been going next — you should recommend good stuff to people and it shouldn’t be just your stuff; you use your relationship, trust, and resources to aggregate stuff and audience across the world of possibilities. (This is essentially what I’m also suggesting to the BBC in my Guardian column this week, coming soon.) In the old static-network world, it made no sense to send people to other networks; in the new, fluid world, they’re going to go there anyway, and so the best thing to do is to help them find the best stuff, redefining the value of a network. And from a business perspective, I argue, you’re wise to grow audience and ad inventory across open networks of the stuff you recommend. Umair says that ABC took a good move in unbundling content from distribution but what it should really be doing is rebundling content with audiences:

Rebundling is where value capture will happen – at communities, reconstructors, markets, networks – that direct people’s attention to individualized ‘casts. This is where branding will be reborn – and where advertising is already being disrupted, ripped apart, and reborn (viz, Google, PPC, pay per call, etc)

Add to this Om Malik arguing that by giving and selling their shows directly to the public, the networks and producers are also disrupting the folks who thought they were the networks of the future: portals.

And see John Hagel saying that networks have a choice between content and relationships.

The most powerful brands in the media business will be held by successful intermediaries that help to consistently improve return on attention for audiences. In the process, the nature of the brand promise will change in a profound way. It will be a massive opportunity for media companies that understand the shift in economic and competitive dynamics and that focus on the rebundling plays required to build these brands.

There’s another way to frame the strategic opportunity/challenge for media businesses going forward. In addition to unbundling and rebundling of content, media companies face a choice: do they want to remain product businesses or do they want to become audience relationship businesses? …

Of course, media companies have elements of both embedded in their companies today, but their hearts and minds are firmly in the product business. Here’s the test: how open is the media company to providing access to third party content on behalf of their audiences? ….

[A]udience relationship businesses take these proliferating content options as an opportunity, rather than a challenge. The more options there are, the more value that can be created by organizing, packaging, presenting and adding to these options for specific audiences.

I agree that we’re headed to a relationship/aggregation economy in media. I think that networks will become fluid, ad hoc, two-way, and open.

But then I still have to come back to the question: Where is the value in fluid networks? Where is the money? I don’t know the answer. For once, I won’t even pretend to.

: : :

These seem to be the choices:

If you just recommend great content, you may build a trusted relationship and a strong brand. But how do you get money — with ads people see on the way to the destinations you recommend? OK, there’s certainly value there. (See BoingBoing, Instapundit, and portals.) But I don’t know how much, or how many will make much, or how long it will last.

If you just aggregate content in full (that is, presenting the complete content over linking to it), you may have viewers but you soon won’t have content, for the creators will want the traffic to come to them in their space serving their goals. (See Yahoo, Breitbart, Blogburst.)

If you just sell ads on these recommended places, you can make money and so can the sites. (See FM Publishing, BlogAds.) I’ve been pushing for an open — and fluid — ad marketplace.

If you just make content you will, of course, have value, but you won’t recognize that unless your stuff is seen and that means you need to be part of networks or have to spend marketing dollars. (See any producer, publisher, writer.)

The advantage of the old, closed networks, of course, is that they combined all this: ABC recommended the show by putting it on the air; it aggregated the content; it aggregated the audience; it sold the ads; it shared the revenue. Life was so simple. Well, so much for that. So what systems will serve the interests of producers, audiences, aggregators, and advertisers?

I wonder whether success in the future, even in an open world, will depend on offering more than one of these aspects of fluid networks:

* You put together recommended sites and sell ads across them.

* You create content and aggregate others’ content.

* In a different context, one of the smartest media execs I know proposes another hybrid model that shares ad revenue between destination sites (to give them the motivation and resources to do good work there) and sites that send them traffic (to motivate them to do that).

But the added complication in all this is that you won’t join just one network. You’ll go to multiple places to get recommendations, and you’ll want your content to be linked on many places to get traffic, and ideally you’ll be able to get ad revenue from multiple sources. This suggests an even more complex hybrid model: He who sends you traffic gets to share in (and perhaps sell) ad revenue based on the traffic sent. So if Instapundit sends me traffic, I give him a share of my revenue for doing so. Or I let my content appear on another site via, say, Blogburst, in return for a piece of their ad revenue. It’s getting overcomplicated very quickly.

Sorry for this overlong treatise on networks. My point, in the end, is only that we are entering uncertain and uncharted waters in fluid networks. It’s not clear where the value will be captured and how it will be shared.

: LATER: See also David Galbraith, Kevin Werbach, and Cory Doctorow on the post-scarcity economy.