HBS Thinkpiece: “Saving the Internet”
Howard Morgan – First Round Capital VC, internet pioneer and all-around genius rockstar in my book – once said online advertising was like the “Wild, Wild West” in a innovation management class from my last semester of business school. So true. But the while the West was gradually settled with railroads, cars and then suburbs, the Internet seems to just keep finding server space for scammers, phishers and black hat SEOs even as its settled by legitimate companies.
Jonathan Zittrain had an interesting take on online security in his article, “Saving the Internet.” He argues that scams and malicious hackers spawn from the Internet’s openness as a developer and user platform, the same conditions which enable innovation and egalitarian participation.
“Though the Internet’s lack of centralized structure makes it difficult to assess the sturdiness of its foundations, there are strong signals that our network and computers are subject to abuse in ways that have become deeper and more prevalent as their popularity has grown.”
Facebook’s Developer Platform is a prime example of what Zittrain characterizes as ambiguously generative, a quasi-open model which promotes developer innovation and user adoption but under Facebook’s control, so that the company can limit what it deems inappropriate or threatening not only for its community but also for its interests.
The quasi-generative model is in the ascendance, and threatens to pervade the Internet with garden walls (again) and even to displace the PC. Zittrain cites the example of “tethered appliances” such as the Xbox and iPhone, which work brilliantly to create a safe and seamless user experience, but also severely limit the potential of marginal developers and users to effectuate disruptive innovation.
To uphold the Internet’s promise of generativity while limiting abuse, he advocates supporting several movements, including Netizenship, Virtual Machines and Network Neutrailty for MashUps. While Zittrain’s argument is brilliant, it approaches the Internet from a macro-level perspective and I’m left wanting more on the micro-level behavior of individual firms and actors.
What do you think? What are the economic trade-offs of open vs. proprietary elements in a product like Facebook or Microsoft Office, from a firm’s point-of-view? When network effects are uncertain, how do you manage both elements to a point of optimal allocation?
