Friday, 24 May 2013
internet business model Part 1.3 in the beginning; history, culture, characteristics, operating system, rules
[This is a re-post (originally posted on 2 Dec 2012) with minor edits, deleted the original post by mistake.]
Another example, APNIC, an organisation that allocates internet addresses (ip addresses) within Asia Pacific. I had first hand exposure to cultural differences as a two-term chairman with a hand in its formation. All telcos, service providers, large web companies and some large companies are members. Technically, APNIC can serve the entire Asia Pacific but some countries wanted their own in-country NIC to carry out the allocation within a single country. This was not necessary but shows perhaps the paternalistic behaviour. Very few countries were given this arrangement. There was another case when a large Asian country wanted a huge block of ip addresses. It is obvious that this country (at that time, internet usage in Singapore was several times larger!) will need it in time but they wanted it well in advance. There was actually no case since APNIC’s egalitarian policy is to allocate fairly to anyone who needs it when they need it. Their lobbying did not work that time. These two examples show that the egalitarian culture in Asia is more challenging. And perhaps the internet business model here needs tampering to suit the Asian culture.
Nevertheless the egalitarian culture is starting to influence the social-economy. The world today works by the informed few controlling everyone else, including selecting films for release. Most independent films would never get a theatrical release but they are appreciated in YouTube. Amanda, my daughter especially likes the self-published Asian comedies, very funny but most will probably never make it to the big screen, not if they have to sleep with the directors to get an airing! Getting a book published is another example of a controlled industry. JK Rowling went through 21 publishers before the first Harry Potter book was finally accepted! Today you can self publish on a number of online venues. Recently there was news of a woman making millions via such egalitarian channels. Google shows traces of egalitarian in its business operations. Accepted, these are just drops in the ocean but as we enter into mainstream of the internet economy, within a decade, these methods would be used more.
For now, the early adopters and almost all of them are from the internet industry seems to be profiting from new methods of doing business, partly derived from this egalitarian culture. Google is a good example. Its Adwords scheme is not driven by the highest bid alone but also quality of website. A traditional business model would simply choose the highest bid to maximise profit. ‘Free’, hardly unique in its use for business is employed only in niche now appears to be the key business driver for many iconic online companies. Free search (Google), free news (Yahoo), free email, free sms have made billions for these innovative companies. A later post on the ‘value of free’ would examine this model in more depth.
The egalitarian and counterculture was also very much a part of Wikipedia where to emphasize humility, the role of administrators was often referred to as being a janitor, ‘may you weld the mop and bucket with equanimity’ and “ignoring rules was a nod to Wikipedia’s culture of ‘radical inclusion,’ something that helped the young project get new participants editing, as storied in ‘The Wikipedia Revolution’. Both are success stories by understanding the way of the web. I always wondered if the judges awarding Michelin Stars are really that good and if Western judges could really judge Asian food. The answer which must come soon will likely be from something called intelligence of crowds. It has been used to make better stock picks than investment analysts and recently by doctors to identify malaria more quickly. I can’t see why it cannot be used to make better culinary judgement.
You may be tiring on the subject of culture so I’ll end this topic with a bit of local internet history. The first internet link in Singapore was established at the Computer Centre of the National University of Singapore circa 1990 for internal use (check). Quick to spot something significant, the government through the then NSTB (National Science and Technology Board) turned this link public albeit only to the academic and R&D industry by creating Technet with a grant. The listing of Pacific Internet (Technet after commercialisation) made it about the first internet company from Asia to be listed in Nasdaq. Commercial interest in the internet in Singapore started around 1994 and perhaps a year earlier in the US. 1995 onwards were heady days of the internet scene here and the rest of the world, culminating in the burst in early 2000. It was an exhilarating period, akin to a cattle market, a casino, new ideas and a haven for entrepreneurs. Obvious only now, such activities herald change, to an economy increasingly being influenced by the internet and its cycle.
We learn from College about business cycles. We will apply this in the next post.
LinkedIn – dr tommi chen
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