Upsetting the Applecart
November 2013
The more I think about the internet, the more I think that we haven’t seen the half of it. We really don’t yet know what we’ve got here, and we certainly don’t know where it’s going. Anyone who tells you different is only speculating, probably wildly.
The sheer pace of change is part of the uncertainty; clever people are always discovering more and more ways to harness the capacity of the web and make use of the information that is stored on it; coming up with entirely new and previously unconsidered notions.
I’m beginning to believe that the old theory that internet years are the same as dog years is a massive underestimate; it’s probably more like mouse years. In particular, the ability of a very small company to have a big impact in a very short space of time is much more marked in the internet industry than in any other I know.
For example, there is a continuous battle for your attention between the creators of software gadgets for smartphones, and such are the prizes for the handful of those that succeed, new ones are popping up all the time. Most of these products will fade away, but some will achieve millions of users and become, probably only briefly, the centre of the cyber universe, at least until the next new idea comes along.
For example, take WhatsApp, a company started only three years ago and which you quite possibly haven’t heard about. They make a little programme that sits in your smartphone and allows you to send written or voice messages and pictures free of charge to other users anywhere in the world.
It’s big business; WhatsApp already has over 350 million users, and whilst it’s free for twelve months, after that they charge a dollar a year. So that’s $350m a year income from scratch in three years; not too shabby.
WhatsApp didn’t even exist three years ago, and predicting its birth would have needed an unusually effective crystal ball, but they are already delivering about 27 billion messages every day - and their competitors do much the same. So in a very short time a company with about 50 employees has had a profound effect on the incomes of the giant telecoms companies, who used to be able to charge us for all those messages but now don’t get a sausage.
;)
Online advertising is undergoing a similar upheaval as a result of the ingenuity of another small company. You may have noticed how much more intrusive and aggressive website adverts are becoming; there is wave upon wave of pop-ups, flashing lights, videos starting without asking and so on. It’s all because the adverts are not generating the response the advertisers want. This, in turn, has led to a huge boost for the services of Adblock Plus, the most popular free advert blocking software which is run by a very small German company incorporated only two years ago, but which already has over 30 million users.
They have stirred things up mightily; in order to earn a living they accept payments from advertisers to let their adverts through, provided the adverts meet Adblock’s criteria for what they call “Acceptable Ads”. These criteria include being static, text only, not too big and so on. You can set Adblock to block these “Acceptable” adverts as well, but only 6% of users do.
As Adblock users grow in numbers (and they are, very fast), and using it becomes the norm, advertisers will become obliged to toe the line to get their adverts displayed. So, the online advert market is currently in turmoil, not to say panic, and all because another tiny company and its clever software has upset the status quo.
The next best thing probably hasn’t even been invented yet. I’ll let you know when it is.
Useful links:
Viber (a WhatApp competitor)
Wechat (another messaging service)
