Web 3.0 isn't the Semantic Web, it's Hailstorm 2.0. Why it Matters & How Microsoft-Yahoo can beat Google.

note: this isn't an April Fool's post, at least not intentionally...

Semantic Web, WTF? 

Blogga please, tell me something i give a shit about.

while i find the concept of a semantic web intellectually stimulating, for the most part i think it's just a lot of geeky mental masturbation (did i just repeat myself?).  personally i hope folks like Metaweb are successful, but i have a feeling it will take awhile to get there.  maybe in 5-10 years let's take another look & see where we're at. 

Until then, i'd rather talk about something with near-term (ie, before the Singularity) implications.

so i have a more practical assessment of what "Web 3.0" is going to look like: it's the "always-logged-in internet", and i'll predict that we could get there in just 2-3 years.  the key to all of this is aggregating large groups of user logins, using friend lists, messaging systems, & feeds for relevant targeting & viral distribution, and integrating payment systems / online wallets to close the loop & conduct ecommerce transactions.

Facebook is almost there with all of these components (e-commerce is coming soon), but even though they're ahead of the game the big winners are still likely to be the two remaining Internet juggernauts Microsoft & Google, and whomever buys Yahoo & AOL (see MSFT & GOOG). Of course NewsCorp / MySpace and Apple will also be significant players, and there's certainly a continuing role for major ecommerce players like eBay and Amazon (or at least their underlying payment systems).  But it wouldn't be surprising to see many of these services consolidated into just 2-4 vendor alliances over the next few years.  the benefits to any of these groups will be substantially greater distribution, user engagement, & monetization.

still with me, Inter-tards?

yeah, i know it sounds like a big clusterfuck, but let me walk you through it.

(note: i'll limit my crystal-ball gazing to the US / English-speaking countries, since i'm not really qualified to talk about the global scene, altho i was impressed by this recent interview & presentation on asian internet & social networking services by Benjamin Joffe).

Microsoft wants Yahoo like Imelda wants Shoes, but Not for the Reasons You Think

Microsoft is about to buy Yahoo, yet most people still have no frigging clue about the real reasons this deal is happening.  for sure, those reasons do include eyeballs, search, & advertising -- Microsoft is prudently paying up for Yahoo's leading share of eyeballs & page views, and more importantly its [gradually decaying] share of the search & online advertising market, which IAB says totaled ~$21B in 2007, and is still growing quite nicely. on those merits alone, and counting the book value of Yahoo's minority stakes in Yahoo! Japan & Alibaba, Yahoo is easily worth $40-50B... for the right buyer, anyway.  but if the Borg was just trying to buy another portal and/or shore up a distant #2-3 position in search, it probably wouldn't be worth the hassle. 

this discussion is timely since the real story is this: Microsoft is trying to leapfrog Google's dominance in search by buying a similarly dominant some might say monopoly position in email & IM, and use those assets to create a universal web login, aka Hailstorm 2.0.

this is vintage Microsoft, right out of the embrace & extend playbook, and it just might work.  note they probably still need a dominant web payment service to seal the deal, but it's not inconceivable to think Microsoft goes after eBay (to get PayPal) or Amazon after they swallow Yahoo.  either would suffice.

btw while i know this sounds like a vast right-wing conspiracy, let me be clear -- the benefits to users are tremendous if/when this starts to happen, regardless whether it's Microsoft or Google (or anyone else) who's leading the charge. 

and for those of you who think Facebook Apps are the biggest waste of time since Tetris, imagine what could happen if the targeting gets a helluva lot better & we start using the same social sharing / viral distribution techniques to discover cool stuff on the open web...

... and then buy it together at substantial group discounts, like a pack of electronic wolves bringing down a very big & tasty e-caribou.  mmm, yummy.  if you think Facebook NewsFeed, Twitter, & FriendFeed are addictive, wait until you see Viral E-Commerce in action.  it will be one giant Fucking E-Feeding Frenzy.

but before we get to end-game, let's try & figure out wtf Web 3.0 means...

"Web 3.0": It's a Series of Tubes

over the past few years i've refrained from offering high-minded opinions about what Web 2.0 means, other than a) it's a good name for a web conference, and b) ajax & flash are cool to look at / drag around.  beyond that there's no real magic to Web 2.0.  sure, lots of web users can help you beta test your startup, crowdsource good content, and filter it better... you can certainly make use of that.  but the biggest benefit of the internet is simply being able to measure & collect user feedback in real-time.  if you're smart, you can use that feedback loop to test for better landing pages / conversion, iterate incrementally, & make better decisions -- resulting in better user experience & (hopefully) the ability to make [more] money.

so when people have long conversations about "Web 2.0" i usually think they're either full of horseshit, selling something, or both.  and until recently anyone who said anything about "Web 3.0" was full of horseshit squared.  given that perspective, believe me it's saying something when i go out on a limb like this and use Web 3.0 in the title of a blog post.  i may indeed be full of it myself, but i really do believe there's going to be a sea-change in how people use the web over the next year or three. 

and while it's related to innovations in social networking & social app platforms, i'm not sure Facebook or MySpace (or even LinkedIn) are the ultimate winners in this one.  social networks are clearly part of the overall web [r]evolution, as are internet powerhouses Apple, eBay, & Amazon, but this one still comes down to either Google or Microsoft (note: assuming Yahoo gets bought by MSFT, & AOL gets locked-up by GOOG one way or another)

Why?

Because the Future of the Web belongs to whomever controls Search, Content, & these 3 core infrastructure components:

1. User Logins & Passwords
2. Friend Lists / Address Books
3. Payment Systems

Messaging systems (email & IM; also SMS) comprise the largest aggregations of user logins.  They also have implicit social graph data & targeted friend lists buried in their data stores, but they take a little mining to get to.  The #1 and #2 players in messaging are Yahoo & Microsoft, with Google & AOL duking it out for #3 (note: Gmail is growing a lot faster than AOL).  And if you include messaging on social networking systems, Facebook & MySpace are also significant players.  These two have advantages over other auth / identity systems, since they've already built out Friend Lists, News Feeds, Social App platforms, & other viral mechanisms that enable amazingly efficient (if spammy) distribution vectors.  But they still need better ways to monetize; and currently Google is doing that best of anyone via search. ecommerce systems like eBay & Amazon are also doing it well via online shopping & online wallets (PayPal, Amazon 1-Click), & Apple is doing a nice job via iTunes collecting payment info on millions of users too. 

I'm sure i'm overlooking a few significant players, and like i said this ain't a global market analysis, but hopefully you get the general Web 3.0 picture.

if not, here it is summarized:

The Always-Logged-In Web: No More Passwords, The Targeted Friend List, & Viral E-Commerce

"Web 3.0" is the condition which exists when someone is always "logged in" on the web, and can move from site to site without ever having to re-enter a username/password. 

It means my address book / list of friends is always available, and more importantly that my current context is understood and considered when i want to share my experience with others.  It means when i'm asked to "send to a friend", instead of seeing a list of 150 friends, or asked to upload & spam my address book of 1500 contacts, i'm presented with a list of only 5-10 contextually-relevant friends... who might be interested in knowing when i'm surfing an ultimate frisbee website for parents of 2 kids, or about to buy a book about italian christmas cuisine traditions in the PA-OH-WV tri-state area.  if you think Beacon was scary, then this service probably isn't for you... but i bet it will work fantastic for many folks, with a bit of tweaking & tuning.

Currently the technology to pull this off is available in bits & pieces through the various internet platform service providers i've noted above.  None of them has enough critical mass of a) users and b) technology components to pull it off by themselves, but with the right acquisitions and rebel alliances, a comprehensive solution is within reach of several vendor groups.  The most likely leaders of those groups are Microsoft and Google, with participation / key infrastructure from other leaders in messaging (Yahoo, AOL), social networking (Facebook, MySpace, LinkedIn), and ecommerce (Amazon, eBay, Apple).

i'll followup up on this core observation in a few future posts, but i think i've outlined the main points.

other interesting items for future posts / discussion:

• engagement: using profile data for landing page optimization
• distribution: using messaging data stores for better contact list targeting / keyword relevance
• monetization: using targeted friend lists & feeds for "viral e-commerce"
  

Comments

[nick]

now then , that was a sexy girl in logans run. damn wish i could remember her name?

[Craig]

The social media space is an interesting one, but its one that is definitely still in its infancy. If web 2.0 was based around the ide of user-generated content, then web 3.0 would be automated content delivery within a networked world?

Interesting stuff to say the least and interesting concepts to kick around. SEO is likely going to change someday. I mean it has to right? How long can the link based model stay in existence?

[Jebs House]

I'm not sure what the hold-up is... maybe they have re-thought their stance on how this is going to actually make the company any money. Or perhaps their lawyers pointed out the liability of providing agents a platform to stick their feet in their mouth. Whatever it is, it's hardly something I'd claim as being "Well done".
www.jebshouse.com

[Benjamin]

Dave, thanks for quoting our presentation on Asian SNS - which lead us to find your blog! How are we going to deal with your archives of great posts ^_^? Feel free to contact me if you need info on JP/KR/CN. Cheers~ BJ

[Damon Billian]

damn, talk about a long blog post. I guess Dave never was taught that simplicity was the key to life;-)

Yahoo, despite their obvious problems, has done a lot of things right in the "social media" space that MSN and Google haven't. Del.icio.us and flickr are impressive properties on their own, so I think that some of the grab might be directed towards these properties as well. My personal opinion, one that may suck, is that Yahoo is doing way better than either google or Microsoft in this arena...

The key problem with Google or Microsoft, IMHO, is that they place way too much emphasis on brain power & not on what the average internet consumer wants. Yahoo largely serves this better than those orgs...

[Henry Story]

Interesting article. Social Networks need to merge as I write in

http://blogs.sun.com/bblfish/entry/2008_the_rise_of_linked

but not by acquisition, even if that is the only tool financiers such as Microsoft can think of to reach their goal. These guys could be in for a surprise when they start discovering the emergence of open distributed social networks.

http://blogs.sun.com/bblfish/entry/rdfauth_sketch_of_a_buzzword

[dave mcclure]

@stanley: even microsoft prob can't swallow both Yahoo & eBay at the same time... but give them another year or three, and they could probably do it. the PayPal assets are high value, but on the other hand Amazon's overall infrastructure & delivery are also quite interesting. anyway, either would be a good acquisition for the borg... once they digest Yahoo.

@jamesG: shit, sorry about that ;)

@bernard: apologies, didn't really mean to sound that dystopian / pessimistic. like i said, i think there's huge benefits for both users & developers to utilize the "always-logged-in" infrastructure all over the web, and on smaller sites as well. not nearly as Master-Slave as perhaps you perceived i was saying.

then again, i'm just reading the tea leaves as i see them. whether or not the MSFT and/or GOOG empires enslave / control users or whether they play benevolent dictators, my "perspective" is not going to change reality. fact is, the cable networks & publishing empires control a good bit of what you watch on tv & read in the press, so they're every bit as powerful as well.

whether or not i paint a warm fuzzy pictures of who controls the horizontal & vertical doesn't make it any less a reality.

it might be great if OpenID wins out, but count me as skeptical on that one. they'll only make it work if a) the UI gets a helluva lot better, and b) if the Big Boys play ball and support the standard. which doesn't really change the fact that they make the standard.

c'est la vie. deal with it, or build a better mousetrap (that can acquire several hundred million logins).

- dmc

[bernard lunn]

Its an entertaining rant - as always - but it paints a picture of a bunch of masters in the universe in Silicon Valley (and Redmond) telling all of us what to do and we all meekly do it. Targeting, contact lists, it all sounds a tad depressing for human beings and as the Internet does invert the power structure you may find that this post is the last gasp of Web 2.0. By the time somebody comes up with a new name that resonates (like O'Reilly did with Web 2.0) I am sure people won't want it to be associated with Web 2.0 so it won't be called Web 3.0.

[Sir James Godwin]

"web 3.0" is already here.. you are a perfect example. It will be apparent when more and more of us start living our lives through social networks/platforms/whatever clever name you want to give digital connecitons.

Example: every business accepts online payments via a social platform ~1 year from now. What then?

I like your style, Dave. Theres just one thing, Dude.. D'ya have to use so many cusswords?

[Stanley Wong]

Why not merge Yahoo! and eBay together and you'll get all the requirements you talk about in one fell swoop.

Yahoo! Assets:
+ Ad Infrastructure
+ Search
+ Content
+ User Registrations
+ Friends Lists + Address books

eBay Assets:
+ eCommerce
+ PayPal
+ Friends Lists via Skype

[Dragos S.]

Dynamic meta-data ?
Evolvable connectivity between information sources ?

aspectweb.org

[peter caputa]

that might just be the best most funniest blog post i ever read. it's smaht, though, too.

[Yura]

That's some quality Web 3.0 babbling. Thanks for the post :)

[Ted Rheingold]

GREAT POST. Way to keep it real.

Ya know, it just might be that by the time this comes around the "Web" moniker will not be descriptive enough. With thousands of network connected devices hitting the market in the coming 2-4 years and APIs, phone apps and TV devices taking the data out of the browser, this may be the last era of dominance for the World Wide Web.

We may have to call this Internet38.0 (I saw 38 because Jonathon Schwartz was asked what web thought of Web2.0 in 2005 and he said we may as well be calling it Internet37, as in the 37th generation of server-client development since DARPAnet. He picked 37 at random, but I'm sure in 20 years the "web" will be just another historical phase along with dumb terminals and bulletin boards)

[shervin]

this link is a better one:

http://www.google.com/patents?id=kh97AAAAEBAJ&dq=pishevar

[shervin]

Dave,

As usual brilliant. I loved the group buying concept tied to the social graph.

Check out me little patent from back in day ;)

http://appft1.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=2&f=G&l=50&co1=AND&d=PG01&s1=pishevar&OS=pishevar&RS=pishevar

[Ian Kennedy]

It's all about the bluetooth headsets. If you think all they do is connect to your cellphone, you're sorely mistaken. They not only listen in on your conversations and record your GPS coordinates, they also can read your brainwaves!

Keep it coming Dave, you're on a roll!

[Josh Fraser]

This is the holy grail for the web and what's crazy is that you're right -- it's totally feasible that we could have something like this within the next couple of years. Great post! Looking forward to reading more today as we get you to the top of techmeme.

[R Aziz G]

Good post Dave. Very similar themes to my old business model, and these of my blog entries (we're on the same level):
http://imagdg.com/?p=1669
http://imagdg.com/?p=1677
http://imagdg.com/?p=6
and a friend's blog: http://jeremystein.net/post/30002859

A lot of people are discussing these topics lately. Loot at Adonomics.com' blog and Shop.com founder, Lee Lorenzen's argument for a $100B Facebook Valuation...

Regarding Web 3.0, I've heard it talked about in two ways:

1) A "genius" older mathmetician and geek from Russia, who's company was bought by Microsoft, confided in me something he should not be saying he said about Mictospft's Web 3.0 plan: Very technical explanation, but I believe the gist is a "ghost". Sound weird? I thought so too. Apparently they feel that information and program files will not exist on any of our devices, they will merely be ghost reflections of files, processes, applications, etc, that are running inside Microsoft. Kinda creepy.

2) The second explanation is "AI" and what I always felt the next natural progression from web 2.0 "cloud" effects would be, and Google founder, Sergey Brin, confirmed my hypothesis the first time I heard him say it (I'm certain he thought of it long before me, but it is logical for anyone to come to this conclusion themselves. He's been preaching about AI for a long time.) So, if you're always buying the same crap at the same rates and times, going to the same places, seeing the same people, and having rational preferences, why wouldn't a commerce platform start correctly guessing my next purchases exactly at the right time, and being so good that I authorize the company to make decisions for me?

I'm not saying any of what I just wrote is the exact definition of what web 3.0 is , or is not. I'm saying that I don't think anybody knows exactly, but Sergey knows best of all.

[Nick O'Neill]

Great post Dave ... I'm going to post a follow-up. I think DiSo is a great start for this but then again it is yet another standard. The social web is one big CF

[Eric N.]

Great write up. I think every CS major has thought up / dreamt about a Web 3.0-semantically enabled world.

Thank you for touching on this topic and reminding me that there's still so much more to come.

EN

[Elliott Ng]

Dis is crazy talk! Actually, it all makes sense..ubiquitous social network everywhere you go. Got a better vision into how semantic web plays into it though. Chat with you about it after April Fools. :)

Twitter: @elliottng