More thoughts on the fragmenting Internet 4

This quote in a Light Reading article about Google’s network infrastructure plans encapsulates why I suspect we may be moving into a new, vertically-integrated phase of Internet development:

“Traditionally, people went to Internet peering points. But because Google is so large, it could be the Internet. People would go there and never leave.”

If Google is big enough to do that, so are Microsoft, Yahoo!, AOL, eBay, and probably a few others. And I’m sure the network owners — Verizon, SBC, and Comcast in particular — would love nothing more than to “be the Internet” for their customers. Wireless operators already are, for the most part.

The threat of vertical integration from the bottom of the stack has been with us since the earliest days of the commercial Internet. Now, surprisingly, it may be coming from the top as well.

There’s nothing necessarily evil in what Google is doing. And they aren’t alone. I just can’t help thinking that we’re moving away from the common platform that defined the Internet for the past decade, and we haven’t really examined what that will mean.

4 thoughts on “More thoughts on the fragmenting Internet

  1. T-Bond Sep 25,2005 1:03 am

    The future is always too tough to call, but surely no one company will store all the content. Therefore, Google-Yahoo will continue to serve as the link between the vendor’s content and the consumer. If this happens to be over a wireless phone network so be it.

    I suppose I am saying that Google does not need to own a cell phone company or a movie library. Can a Time Warner afford to lock up its movie library; not allowing access to millions who view over the internet but who do not subscribe to a monthly cable service? I appreciate that ESPN will want a subscription fee but with so much potential choice for the consumer will ESPN only be available through a $40 per month package of “channels”?

    If I understand correctly, Google is not trying to maintain a copy of all library books and TV shows but is only trying to index all the words. Movie and TV show production will still be solid businesses. The internet ranking systems will bring large viewership (and thus large revenues) to the best productions.

    The Hollywood hype will continue. TWX will surely distribute films through the theater system. After the first run, the film may be available over the internet for a fee but I can’t see the viewer having to sign up for AOL to make the purchase.

    Another way of thinking is that if city wide and then nationwide “free WIFI” become the norm, then the consumer will pay only for content. Search will still be needed to match the consumer to the content. The trillions of transactions daily that help consumers find everything from toothpaste to pizza should more than pay for the distribution of information; as the costs of storage and distribution continue to be cut in half every 18 months or so.

    I thank you for your post and the opportunity to respond. I agree that convergence will mean continued consolidation. I wonder how much vertical integration will be necessary. Perhaps TWX-AOL works out beautifully in the long-run!

  2. Antoin O Lachtnain Sep 26,2005 3:15 am

    Well, I think there is definitely a move towards an end-game now, as I wrote at http://www.eire.com/2005/09/16/skype-as-a-payments-platform/
    .

    Basically, it looks like there are going to be four ‘hubs’ of Internet services (Google, Yahoo, MSN, eBay/Paypal), all offering basically similar stuff, but each with particular strengths.

    It is interesting to see someone like Vint Cerf move from MCI to Google. It signals a move in focus away from the network layer to the content and applications layer.

  3. Visitor Oct 7,2005 5:47 pm

    In a previous work incarnation, I was doing lots and lots of Dell in-home warranty repairs. There is a significant number of people for whom AOL *is* the Internet.

  4. tom Jan 3,2006 9:59 pm

    Thank you, very interesting!

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