The Gift Economy

The gift economy is an interesting current trend for large companies who are attracting the most users and advertising dollars on the Internet. Companies like YouTube, Google and Facebook provide a software platform that costs millions of dollars in man hours and hardware to provide. Then they give it away for free. The users create the content on these massive websites that draws other people to these web sites. Publishing and expressing yourself is free and available to many, but only a few profit from it. Those that provide the Internet services have the right to sell advertising to businesses who want to connect with the millions of users on these social networks. Google and Facebook are billion dollar companies off the advertising revenue generated.

Facebook and Google are showing us a glimpse of what the future of the Internet and computing looks like. Companies that are building Internet Software Services run by massive computing centers serving millions of people. The goal is to become a utility like electric companies where people get their processing power and software over a broadband internet connection. People will get all the processing power and the latest software on demand as they need it. Bill Gates told the top Microsoft managers in 2005 where things were headed. Because of the Internet, the computing business was moving away from software installed on personal computers to “Internet Software Services.”

In the book The Big Switch, Carr shares this quote. “Software”, Gates told his troops, “was no longer something people had to install on their computers. It was turning into a utility service supplied over the Internet.” Both Google and Facebook are examples of Internet Software Services people use through their web browsers. “The broad and rich foundation of the Internet will unleash a ‘services wave’ of applications and experiences available instantly.” Services designed to scale to tens and hundreds of millions of people will dramatically change the nature and the cost of solutions delivered to enterprises and small businesses. In the future people will not need more and more powerful computers and to keep upgrading their software, they will simply use software services provided through their high speed internet connection.

Their goal is to eventually make computing power and software cheaper for users to use over a broadband connection than to maintain and upgrade personal computer hardware and software. In his book, The Big Switch. Rewiring the World, from Edison to Google, Carr describes how a similar strategy was used to consolidate electricity as a commodity provided by large utility companies.

People are increasingly using portable devices where they are always connected to the Internet with iPhones, iPads, Android smart phones and tablets. In September, Amazon announced a new full color and multimedia capable tablet that was half the price of the wildly successful iPad. People are now accessing the Internet anytime and anywhere. Because phones and tablets are easier to carry around than personal computers, society is entering an era of constant connectedness.

The challenge for businesses and educators in the 21st century will be shifting their web presence stay in the mainstream of where the Internet users are spending their time. With 800 million users on Facebook and half of all Facebook users spending more time on Facebook than watching TV, businesses and educational organizations need to have a Facebook presence. With  54% of all mobile phone sales being smart phones this year and over 100 million smart phones being sold each quarter, organizations and businesses need a website or smartphone app designed for the small screen. And with tablets becoming the preferred digital media viewing device for ebooks and videos, development for that platform will be increasingly important in the coming years.

Recommended reading:

The Big Switch: Rewiring the World, From Edison to Google by Nicholas Carr

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