Network effects accelerate when services are accessible wherever the user is engaged. That leap has been made in many different contexts in online media from advertising (AdSense) to participation and personal publishing (Flickr and Twitter).

More mainstream publishers got close to this when they began publishing RSS feeds, but the effects of the RSS reading experience don’t come back to the publisher and add value to the wider network like they should.

A click back to the article on the source domain does not improve that article for everyone else who reads it, for example.

It may seem difficult to create network effects around content except in the form of things like reader comments and social bookmarking. But now there are some new ways to create network effects in the publishing business.

Most publishers have found some kind of social tool that makes sense as part of what they offer. It may be a forum, a friends network, or in some cases a game or contest. All those things can capture activity and engage the participants from anywhere on the Internet.

We recently launched a new fantasy football application at The Guardian (when I say ‘football’ I mean ’soccer’), and we immediately began thinking about where else people might enjoy playing the game. The developers and product manager cranked out a very rudimentary iGoogle Gadget version of the app so that you can stay on top of what’s happening in the game directly from your browser start page.

The gadget is not yet fully functional, but when we start reflecting your activity in the game back to you through the gadget then network effects will be possible. I haven’t been a huge fan of most of the social apps out there, but I can definitely see myself using this one a lot.

In many ways, it also makes me a more frequent user of Google than I already was, but that’s a topic for another post.

At this point in the evolution of the Internet, the online product launch checklist probably dictates that a portable version of a service is a minimum requirement, must-have feature. In that model, the domain can serve as a rules engine, storage and a transaction hub, but the activity of an application needs only a lightweight container and an end-user who’s happy with the experience wherever it may exist.

There’s a reason that the world fully embraced HTTP but not Gopher or Telnet or even FTP. That’s because the power of the Internet is best expressed through the concept of a network, lots of interlinked pieces that make up something bigger rather than tunnels and holes that end in a destination.

The World Wide Web captured people’s imaginations, and then everything changed.

I was reminded of this while reading a recent interview with Tim Berners-Lee (via TechCrunch). He talked a bit about the power of linking data:

“Web 2.0 is a stovepipe system. It’s a set of stovepipes where each site has got its data and it’s not sharing it. What people are sometimes calling a Web 3.0 vision where you’ve got lots of different data out there on the Web and you’ve got lots of different applications, but they’re independent. A given application can use different data. An application can run on a desktop or in my browser, it’s my agent. It can access all the data, which I can use and everything’s much more seamless and much more powerful because you get this integration. The same application has access to data from all over the place…

Data is different from documents. When you write a document, if you write a blog, you write a poem, it is the power of the spoken word. And even if the website adds a lot of decoration, the really important thing is the spoken words. And it is one brain to another through these words.”

Data is what matters. It’s a point of interest in a larger context. It’s a vector and a launchpad to other paths. It’s the vehicle for leverage for a business on the Internet.

What’s the business strategy at the data layer?

I have mixed views on where the value is on social networks and the apps therein, but they are all showing where the opportunity is for services that have actually useful data. Social networks are a good user interface for distributed data, much like web browsers became a good interface for distributed documents.

But it’s not the data consumption experience that drives value, in my mind.

Value on the Internet is being created in the way data is shared and linked to more data. That value comes as a result of the simplicity and ease of access, in the completeness and timeliness, and by the readability of that data.

It’s not about posting data to a domain and figuring out how to get people there to consume it. It’s about being the best data source or the best data aggregator no matter how people make use of it in the end.

Where’s the money?

Like most Internet service models, there’s always the practice of giving away the good stuff for free and then upselling paid services or piggybacking revenue-generating services on the distribution of the free stuff. Chris Anderson’s Wired article on the future of business presents the case well:

“The most common of the economies built around free is the three-party system. Here a third party pays to participate in a market created by a free exchange between the first two parties…what the Web represents is the extension of the media business model to industries of all sorts. This is not simply the notion that advertising will pay for everything. There are dozens of ways that media companies make money around free content, from selling information about consumers to brand licensing, “value-added” subscriptions, and direct ecommerce. Now an entire ecosystem of Web companies is growing up around the same set of models.”

Yet these markets and technologies are still in very early stages. There’s lots of room for someone to create an open advertising marketplace for information, a marketplace where access to data can be obtained in exchange for ad inventory, for example.

Data providers and aggregators have a huge opportunity in this world if they can become authoritative or essential for some type of useful information. With that leverage they could have the social networks, behavioral data services and ad networks all competing to piggyback on their data out across the Internet to all the sites using or contributing to that data.

Regardless of the specific revenue method, the businesses that become a dependency in the Web of data of the future will also find untethered growth opportunities. The cost of that type of business is one of scale, a much more interesting place to be than one that must fight for attention.

I’ve never really liked the “walled garden” metaphor and its negative implications. I much prefer to think in terms of designing for growth.

Frank Lloyd Wright designed buildings that were engaged with the environments in which they lived. Similarly, the best services on the World Wide Web are those that contribute to the whole rather than compete with it, ones that leverage the strengths in the network rather than operate in isolation. Their existence makes the Web better as a whole.

Photo: happy via

I’ve been looking for a way to share playlists on my blog and elsewhere online for a long time. It’s been surprisingly hard to find a really convenient way to do it.

DRM and industry lockdown have been a big part of that, but there have also been too few technical ways to point to music files that are already publicly available. There are tons of legal MP3’s on the Internet that reside at readable URLs today.

Lucas Gonze and his team at Yahoo! solved this problem. They launched a source-agnostic embeddable media player. You can read more about it on YDN.

It’s fantastically simple. All you do is paste this reference to Yahoo!’s media player javascript code anywhere on your web page (I added it at the bottom of my blog templates):

<script type=”text/javascript” src=”http://mediaplayer.yahoo.com/js”></script>

Then you just add an HTML link somewhere on your web page to any MP3 file you want to see in your playlist.

That’s it. You’re already done. The link you just made will now include a small play button in front of it, and a mini media player will appear in the browser.

Here’s a short playlist I quickly put together to show how it works. The 4th track here is particularly relevant to my life:

Cut Chemist – The Garden
Young Einstein (Ugly Duckling) – Handcuts Soul Mix
They Might Be Giants- Birdhouse in Your Soul
LCD Soundsystem – Losing My Edge

The code for that playlist looks like this:

<a href=”http://download.wbr.com/cutchemist/TheGarden.mp3″> Cut Chemist – The Garden </a>
<a href=”http://www.uglyduckling.us/music/HandCutsSoulMix.mp3″> Young Einstein (Ugly Duckling) – Handcuts Soul Mix </a>
<a href=”http://midwesternhousewives.com/mix/The%20Might%20Be%20Giants-%20Birdhouse%20in%20Your%20Soul.mp3″> They Might Be Giants- Birdhouse in Your Soul </a>
<a href=”http://www.personal.psu.edu/users/s/m/smk291/muchies/LCD%20Soundsystem%20-%20Losing%20My%20Edge.mp3″> LCD Soundsystem – Losing My Edge </a>

They’ve included some other nice things in the code that give you some flexibility. You can create a shareable playlist file, and you can add cover art, for example.

What I like most, probably, is the architecture of the solution. Anyone who already links to MP3 files can just add the music player javascript code to their page templates, and it will just work immediately. You don’t have to force fit a heavily branded HTML badge into your web page. And since the links are all standard HTML href’s, the content of the playlist is search engine friendly.

It’s the first time I’ve seen a media player so closely aligned with the way the Internet works.

Lucas posts about the need to unlock how media files are referenced. He wants to take the complexity out of distribution and reduce the concept of music sharing and discoverability to the Internet’s roots with URLs as identifiers:

“Almost all online music businesses right now are in the distribution business, even if they see other functions like discovery or social connection as their main value, because they have no way to connect their discovery or social connection features with a reliable provisioning service from a third party. But provisioning is a commodity service which doesn’t give anybody an edge. They don’t want to import playlists from third parties because *that’s* where they are adding value.

Exporting playlists for others to provision, though, is a different story, and it makes much more sense from a business perspective. Let somebody else deal with provisioning. This is what it would mean for somebody like Launchcast or Pandora to publish XSPF with portable song identifiers that could be resolved by companies that specialize in provisioning.”

It seems Lucas is thinking about how to get music flowing around the Internet with the same efficiency that text has enjoyed. Very smart.

I’m intrigued by the various ways people view ‘value’. There seem to be 2 camps: 1) people who view the world in terms of competition for finite resources and 2) people who see ways to create new forms of value and to grow the entire pie.

Umair Haque talks about choices companies make that push them into one of those 2 camps. He often argues that the market needs more builders than winners. He clarifies his position in his post The Economics of Evil:

“When you’re evil, your ability to co-create value implodes: because you make moves which are focused on shifting costs and extracting value, rather than creating it. …when you’re evil, the only game you want to – or can play – is domination.”

I really like the idea that the future of the media business is in the way we build value for all constituencies rather than the way we extract value from various parts of a system. It’s not about how you secure marketshare, control distribution, mitigate risk or reduce costs. It’s about how you enable the creation of value for all.

He goes on to explain how media companies often make the mistake of focusing on data ownership:

“Data isn’t the value. In fact, data’s a commodity…What is valuable are the things that create data: markets, networks, and communities.

Google isn’t revolutionizing media because it “owns the data”. Rather, it’s because Google uses markets and networks to massively amplify the flow of data relative to competitors.”

I would add that it’s not just the creation of valuable data that matters but also in the way people interface with existing data. Scott Karp’s excellent post on the guidelines for transforming media companies shares a similar view:

“The most successful media companies will be those that learn to how build networks and harness network effects. This requires a mindset that completely contradicts traditional media business practices. Remember, Google doesn’t own the web. It doesn’t control the web. Google harnesses the power of the web by analyzing how websites link to each other.”

One of the more interesting sciences, in my mind, is how information relevance is both determined, surfaced and then evolved.

In Fred Wilson’s recent Cautionary Techmeme Tale he argues that making news popular takes away its social context and therefore becomes meaningless. He found Techmeme more useful when its sources more closely resembled his network of friends:

“For years, I’ve been using curators to filter my web experience…Techmeme has been the killer social media curator for my world of tech blogs. Lore has it that it was created using Scoble’s OPML file. It doesn’t matter to me if that’s true or not, I love that story. Because my OPML file was unusable until I found Techmeme and after that I stopped reading feeds and started reading curated feeds.”

This feeds into a larger argument about why pop culture and the art of being or becoming popular can be a bad thing. Not long ago I was inspired by the movie “Good Night and Good Luck” to dive into this idea myself:

“The real problem with popularity-driven models is that they reduce both the breadth and depth of the sources, topics and viewpoints being expressed across a community. Popularity-driven models water down the value in those hard-to-find nuggets. They normalize coverage and create new power structures that interesting things have to fight through.”

This is exactly why personalization, recommendations and social media technologies really matter. They can solve this problem of creating conformist media consumption practices by creating relevance through networks of people rather than through networks of commercial institutions.

I haven’t used My Yahoo! as much as I’d like, but there is a simple function in it that I love which could ultimately create amazing benefits for people who want a human filter for the Internet. It’s called “Top Picks”.

“The Top Picks module automatically highlights stories from your page, based on the articles you have recently read on My Yahoo! The more stories you click on, the more you will see this module reflect your interests.”

Actually, the technology beneath it is not so ’simple’ but the application of it here makes so much sense that it feels like it’s simple when you watch it work. It works by using implicit behaviors. I don’t have to tell it what I like. It learns.

If it could also show me what my social network is tapped into right now, then the experience would feel nearly complete.

Media researchers will note here that people need pop culture to feel connected to a greater whole. I believe that’s true, too. Television is an amazingly powerful community builder.

But I would gladly trade a powerful singular social voice tied together by networks of distribution ownership for a less unified but still loosely connected network of pop culture tied together by my personal activities and my social connections.