The end of the monopolistic web?

Except maybe in totalitarian states, you cannot have a single publisher. Most large cities had multiple independent newspapers.

In recent years, we saw a surge of concentration in newspaper and television ownership. However, this was accompanied by a surge of online journalism. The total number of publishers increased, if nothing else.

You can more easily have a single carrier/distributor than a monopolistic publisher. For example, the same delivery service provides me my newspaper as well as a range of competing newspapers. The delivery man does not much care for the content of my newspaper. A few concentrated Internet providers support diverse competing services.

The current giants (Facebook, Twitter and Google) were built initially as neutral distributors. Google was meant to give you access to all of the web’s information. If the search engine is neutral, there is no reason to have more than one. If twitter welcomes everyone, then there is no reason to have competing services. Newspapers have fact-checking services, but newspaper delivery services do not.

Of course, countries like Russia and China often had competing services, but most of the rest of the world fell back on American-based large corporations for their web infrastructure. Even the Talibans use Twitter.

It has now become clear that Google search results are geared toward favouring some of their own services. Today, we find much demand for services like Facebook and Twitter to more closely vet their content. Effectively, they are becoming publishers. They are no longer neutral. It is undeniable that they now see their roles as arbitrer of content. They have fact-checking services and they censor individuals.

If my mental model is correct, then we will see the emergence of strong competitors. I do not predict the immediate downfall of Facebook and Twitter. However, much of their high valuation was due to them being considered neutral carriers. The difference in value between a monopoly and a normal player can be significant. People who know more about online marketing than I do also tell me that online advertisement might be overrated. And advertisement on a platform that is no longer universal is less valuable: the pie is shared. Furthermore, I would predict that startups that were dead on arrival ten years ago might be appealing businesses today. Thus, at the margin, it makes it more appealing for a young person to go work for a small web startup.

I should stress that this is merely a model. I do not claim to be right. I am also not providing investment or job advice.

Further reading: Stop spending so much time being trolled by billionaire corporations!

Published by

Daniel Lemire

A computer science professor at the University of Quebec (TELUQ).

4 thoughts on “The end of the monopolistic web?”

  1. Yes! There is finally good competition for Google (the search engine)! There’s at least 3 startups that try new things in this domain, and often beat Google at search quality: Kagi.com (the one I use day to day), you.com, and neeva.com

  2. If (and I have no idea if this is on their minds at all) the legislature (US) decide to force these “carriers” to have their users use their real names (like Google Plus used to), I think we would find that the entire situation would change. It would reduce or remove the need for censoring and fact checking, and allow the big tech companies to once again let go of responsibility for what people say online.

    However, no tech company is going to succeed in doing this alone – people love their anonymity and the ability to shit-post. It would have to be legislated on all the companies. Google Plus kind of proves the point – we are hard wired to be drawn to drama and conflict over reason and debate.

    1. If nothing else, forcing people to divulge their personal information to corporations would be a step backward.

      It is in the interest of these companies so that they can sell back this information, but hardly in our interest.

  3. If you aren’t already reading it, you might enjoy Matt Stoller’s column, Big.

    Your prognosis that disruption will come is wise. I cannot help but wonder how VCs are preparing their halls for the feasts to come…

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