Jaron Lanier, who is often referred to as a "father of virtual reality", told the Vancouver event that the two firms should let users pay for their services as an alternative to relying on ads. "These companies need to change," he said.
Mr Lanier was a frequent TED (Technology, Entertainment and Design) speaker during the 1980s. But, he said, even then he had realised that "the technology we needed and loved could also be our undoing". "We made a very particular mistake in the 90s when early digital culture had this lefty, socialist mission, which meant that everything on the internet must be available for free," he added. That decision led directly to the advertising model that allows Google and Facebook to flourish, he explained.
"In the beginning it was cute but as computers became more efficient and algorithms got better, it can no longer be called advertising any more - it has turned into behaviour modification." It was, he said, a "tragic mistake" rather than a "wave of evil", pointing out that he knew and loved many people working at the two tech empires. But, he explained, the advertising model had led to addictive social media platforms that rewarded people for sharing their information with "likes".
He also claimed that Google and Facebook had become as "hooked and trapped" on the advertising model as their users. "It is time to turn back the clock and remake that decision. Many people would pay for search and social networks," Mr Lanier said.
http://www.bbc.com/news/technology-43639712
This is potentially doable, assuming a mixture model of ads + payments. Google's revenues per user is about $160; which would be about $15 a month. The problem is they already have 1.3 billion customers, and the non-customers are likely not going to spend $15 a month once they start using Google.
ReplyDeleteGoogle's growth prospects under a flat monthly fee don't look great, they don't have room to grow. Ads have the property that they can continue to improve the value of their user base to ad buyers. The value of the ad is essentially (profit of good sold) * (probability increase of ad resulting in sale), and that is basically unbounded and automatically scales with inflation.
Google's growth rate has been 20% a year, which means they'd need to either find 20% more customers, or increase the price by 20%, while maintaining the number of users.
This seems less achievable than just selling ads.
What does this solve?
ReplyDelete"Many people would pay for search and social networks"
What about others? We will let them be exploited just as long as I am able to pay not to be? :)
Google and Facebook are giants in advertising - no direct payment for their services would change their focus.
But Facebook or Google doesn't want to build paid service without the power ( "behaviour influence") they have. Probably people want it, and I agree, many of us would pay. But they don't want it. They like the power they built and won't abandon it!
ReplyDeleteI don't think people realize just how valuable their info is. A pay-to-play option on Google would probably be so expensive in order to offset ad revenue that people wouldn't buy it.
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