OpenBusiness talked to Esther Dyson about how business models are adapting to an internet environment that champions openesss. Esther’s upcoming PC Forum focuses on how users are transforming the internet and placing new demands on businesses. From Open Source to Open Content, new forms of organization, production and distribution are emerging. But how can these ventures produce a revenue and sustain themselves? For how long can we give content away for free? (...)
OB: Though the internet environment is very different to phsyical retail or entertainment space. It’s global, virtual and without physical presence….
Esther: Yes, that’s true, and it creates different opportunities versus the physical space. Communities and individuals have more choices. And within these choices lie opportunities for businesses to create attention….
OB: Isn’t that what seems to puzzle so many people out there? There are businesses being created with not much else besides the hope to create attention. Attention seems to be the basic currency and the game seems to be to give ever more away for free to get this attention.
Esther: Well, true, right now, a lot of companies seem to be using the ‘get attention from the blogosphere, and then sell out to Yahoo! or Google’ strategy. That’s another attention strategy, but it’s not a sustainable one for most of the market.
Attention is a concept I have used in this context for a long time. Yes, it is basically the kind of currency we usually talk about, but it comes in many different forms, and the strategies to create it and texploit it are consequently very diverse. Some times it’s about preference, or getting people to spend their time at a space you offer. Once you get attention – which may be a brand preference, a community people want to join and stay in, a recognition for your expertise, a software platform people want to use – then you need to figure out how to charge for something related – storage of photos, for example, or programming or training services, or personal appearances, or membership in the community.
OB: This brings me to perhaps the two most prominent internet businesses at present – Google and Yahoo!. They both seem very open. They offer excellent services for free, from email, to search, to maps, to community services. They both seem not interested in owning content, but still pose a significant challenge to established content industries. Would you call these “Open Businesses”?
Esther: Yes, they both offer tremendous services for free – though they certainly charge advertisers to share the attention they have earned! They have found ingenious ways to turn access to content into a business. Yahoo! is actually more interested in providing high quality content – such as services information, news and entertainment – and building communities than Google. In many ways, Yahoo! believes in smart, “intelligent design” and careful strategies, while Google follows blind evolution and operates a Darwinian fitness landscape within its development organization. They create services, put them out there and let people figure out how useful they are. GoogleMaps for example is a basic service – it gives access to maps – but it lets people build not just on top of it but next to it. In this sense Google provides a platform and then lets creativity blossom without too much direction. (Although I suspect they do a little more internal strategic thinking than they get credit for!)