America Offline: Fall of a Walled Gardener

This is a Tale of Two Internets, with a vivid beginning but no clear ending yet.

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"America Offline" imageTechnophiles of my ancient generation fondly ruminate over the early glory days of wide network communications, when there were basically two modes: ARPANET, and Bulletin Board Systems (BBS).  As many know the former was a US government-sponsored networking project that was originally closed to the general public, while the latter was a collective prototype Internet rooted in normal telephony infrastructure and was easily accessible by anyone with the right equipment.

But something curious happened over time.

The Rise

Stewardship of ARPANET (which spent a brief period as DARPAnet) was turned over to the National Science Foundation (NSF) in 1973. By the late 1980s, the network was bearing more university-driven traffic than military– mostly email. But the Internet itself wasn’t fully opened to commercial enterprise until 1991. Still, the transition from closed to open ensured wide adoption and growth of the Internet as a worldwide communications standard and leveled formerly disparate playing fields.

Simultaneously, rapid improvements in modem technology and technical protocols allowed popular playground giants like Prodigy, Compuserve and America Online (AOL) to evolve from humble BBS beginnings. Fierce competition for users ultimately shook out all but one. AOL’s landfill-topping tactic of carpet-bombing the snail mail system with free diskettes and then CDs was roundly criticized from many directions, but did serve to secure its success. Ultimately, AOL crowded out or absorbed its competitors. Its walled garden design was at odds with the surrounding ecosystem, but AOL used its Internet Service Provider (ISP) services to draw in customers along with user-targeted features (many not available via the Internet at large) to keep them there.

A Fall Begins

Flash forward to the big bellwether year for technology, 2000. That’s when AOL was massive enough to scoop up publishing giant Time Warner and have its acronym prefixed to the merged entity’s new name. Almost immediately afterward, naysayers were given plenty to crow about as the AOL business’ profits began a slide from which they would not recover. By the end of 2009, a struggling AOL was cut loose and back out on its own.

Read: AOL CEO Plans Return To Being A ‘Build’ Company

At the close of April 2010, CNN reported that AOL’s stock price had significantly dipped after company reports of declining results. That slide continues as AOL loses not only subscribers but also advertisement placements. I don’t think any limbs are threatened by predictions of its eventual demise or, ironically, absorption by another business. The latter thought leads to a critical question: who would profit most from AOL’s failure?

Heir Apparent?

As AOL’s star fades, another has grown with inverse intensity. The social network site Facebook started as a way for college students to see who was enrolled in what classes. It has since eclipsed MySpace to become the de facto Internet gathering place. Given the overlap between its typical usage and that of AOL, a competitive struggle was inevitable– one that rising star Facebook is clearly winning.

Maybe Facebook will eventually wind up picking over AOL’s (and possibly MySpace’s) parts. Bringing in AOL’s subscriber base could still grow Facebook, even with defections. The connection of AOL and Facebook chat services could be one aspect of facilitating such a merge.  Or then again, Facebook’s acquisitions like Gowalla may make other moves moot.

Facebook’s growth and changing business model is troubling to some. The company aims to be The One Login provider, and adoption of its authorization services has been steadily increasing. If it comes to dominate in this area, it will be as if AOL had actually triumphed over the open Internet. One example of how this can limit choice is CNN’s usage of Facebook login as the default means of commenting on certain stories. This is especially ironic given some of CNN’s recent coverage of Facebook backlash, most of which now stems from the default opening of private user information. (also see [1] [2])

Read: Facebook Joins Internet Giants Endorsing Piracy Bill

One caveat to such concerns is Facebook’s move in 2009 to join OpenID, the popular web login service provider. It remains to be seen, however, what that move will ultimately mean for the Internet at large. The same goes for what a likely Facebook-Google war could do to the web landscape.

Why This Matters

The Internet itself is facing a huge paradigm shift and has been resisting mightily. That sea change orients around mobility, one of the key economic drivers currently and for the foreseeable future. As cell phones shrug off prior technical limitations and increasingly implement such features as large touchscreens, Internet services become a bigger part of their day-to-day use. The problems of mobile device connection speed, display and horsepower are largely solved in most developed regions. The only thing hampering them now is the need for frequent, lengthy recharging, and progress in that area should address that shortcoming well enough soon.

Read: 70% of Companies Have not Optimised Their Website for Mobiles

User acquisition and retention is the name of the Internet game these days, and as technology frees more people from desktops, herding their services into this or that cloud becomes the most important aspect of modern commerce. The more user data solely contained by one closed cloud, the more influence the provider will have over media publishing, advertising and other e-commerce activities.

In this era of Internet uncertainty, many major players are seeking to carve the landscape up into walled-off sections under their control. As an example, Apple’s resistance to Adobe’s Flash technology. While the lockout may look good on the surface, the ultimate goal is to replace competing technologies with Apple’s license-bound preferences (H.264 in this case) and dictate terms to electronic media publishers. That video codec’s main competitor, Theora, now faces a legal challenge by Apple (and others) no doubt designed to prevent its widespread adoption by way of old-fashioned fear, uncertainty and doubt (FUD). And as paper publishing declines, an Internet free of singular media dominance grows in importance.  AOL’s desperate purchase of The Huffington Post works against that.

In an environment already afflicted by way too much media-provider consolidation, do we really want even less choice? Virtual monopolies can seem so good when they’re introduced but history shows they soon lead to consumer pain.

Open Alternatives?

One initiative that may offer encouragement is the Diaspora project. Positioned as a sort of “open Facebook”, the service places hosting into the hands of members and removes the spectre of ultimate, centralized control. The project page can be found here and its activity tracked on twitter, where at the time of this posting it currently boasts over 75,000 followers. Diaspora’s success will largely depend on true open source advocates and defectors disenchanted by Facebook’s hardening silo.

There are also some working on open social networks dedicated to protecting free speech and the right of assembly.  Will such highly-specific approaches catch fire?  Their possible failures could certainly be seen as painfully ironic.

Final Outcome

I have mixed feelings about the decline of the AOL empire. True, its business model runs contrary to my thinking these days but there was a time when I earned free ISP services by volunteering as an AOL forum moderator. A deal with the devil that at least got me connected during a period when every penny counted.

But mostly I’m glad that today I can separate various services and go with whom I choose for each. My concern now is that choice may be evaporating. The success of Big Business in the United States to easily and completely bastardize a term like “net neutrality” demonstrates that such fears are justified (you can read Vint Cerf‘s 2005 thoughts on the subject here).

Read: 5 Hot Technology Policy Agenda Items You Need to Watch

Bottom line, information wants to be free. Past experience reminds us that prior attempts to own it are ultimately doomed to failure, so in that we should find some marginal comfort. The problem lies in the near future, as we suffer through yet another attempt by a powerful few to monopolize something that should always be free: the creation and distribution of information.

Reprinted with updates from Tabula Crypticum.

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Editor-in-Chief. Making tech accessible since the Jurassic. Personal ramblings at texrat.net. Follow @texrat on Twitter.

Latest posts by Randall "texrat" Arnold (see all)

  • http://twitter.com/almehdin Daniel Sandman

    People are generally lazy.. so they normally go with the easiest option.

    I hope mesh internet start to grow and become possible.. not good that one country can rule it all.

    • http://post404.com/ Randall Arnold

      Agreed.  Ongoing global threats to block domains and arbitrarily control traffic threaten to carve the Internet up in ways that even the premium services won’t like.

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  • http://twitter.com/Inacurate Inacurate

    I’m happy to see any walled garden go up in flames and will help pour the fuel or start the fire if possible.

    In some situations, walling your users off for a better experience is a great thing to have.  However at no point should the users be forcibly chained to the service if real money is involved.  When it comes to virtual money of any kinds, it does not matter.

    But I feel that if I pay for something digital, it should be mine wherever I choose to go, if there’s no technical reason why I can’t. As an example, if I buy Angry Birds (never have, never will) on ecosystem S, I should be able to transfer that “purchase” to ecosystem A.

    Part of the root problem is consumers being “OK” with having to repurchase content for which they’ve already paid.  In some cases, the argument is the licensor needs to make money, hence there has been no framework to transfer a license from one ecosystem to the next.  While I understand the argument, I call BS.  If the licensor needs to make money, they shouldn’t do it by selling me the same “license” to use their product on multiple ecosystems, but by selling me their product at the “real” price for use anywhere.

    I’m tired of products/services in the United States being undersold in terms of price because consumers don’t feel the product/service in question is worth more.  Companies should figure out a way to communicate the real value of their offer so they can sell it at that amount.

    Mobiles and subscription services are just two of the industries that suffer from this and only help to enable walled gardens.  They could also pay their “top” employees a deserved amount instead of an inflated one and maybe they’d see more profits and not need to overprice their offerings to begin with.  But that’s another whole topic of discussion

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