NEW YORK--Web pioneer and conference honcho Tim O'Reilly warned the audience at the Web 2.0 Expo here on Tuesday afternoon that he thinks "we're headed into another ugly time." Namely, everybody is just being really nasty to each other. And it makes his hippie soul hurt.
For example, Rupert "Dr. Evil" Murdoch keeps threatening to pull News Corp.'s pay wall-guarded content from Google, perhaps offering an exclusive deal to another search engine for one hundred billion dollars (give or take a few bucks).
Those ubiquitous URL-shortening toolbars are throwing Web addresses behind a cloak of invisibility, O'Reilly said, and they "don't let you navigate freely like the Web used to work." With Google's Chrome hurling itself into the mix, the browser and operating-system wars are starting to look less "Mean Girls" and more "Aliens vs. Predator."
But O'Reilly's attitude isn't "bring it on, and get me a large popcorn with extra butter, while you're at it." Rather, he hinted that at least in some cases, he's willing to embrace Google as a big, cuddly, benevolent dictator in the midst of it all. It's "a monopoly that's a service of value to users," he said, adding that generally, when Google makes a product with the primary goal of one-upping the competition--Knol vs. Wikipedia, Checkout vs. PayPal--it's not a success.
That's probably because, at least right now, among all the giant robots stomping about the series of tubes, Google is the one that most resembles O'Reilly's vision of the "open Web." In a blog post prior to his speech, he predicted that Microsoft could take over this role. Or not. Either way, he insisted that "it's time for developers to take a stand."
Setting off this kind of electric shock in the Web's punditocracy is a great way to drum up attention and newsworthiness that doesn't have anything to do with philosophizing about the recession, extolling the possibilities of the real-time streaming Web, or predicting which dot-com figurehead is going to be the most plastered at South by Southwest this year. Thank goodness! That stuff was getting so boring!
And O'Reilly's rallying cry has already gathered reactions. Barbarian Group executive Rick Webb, for one, posted a colorful retaliatory blog post, in which he said that "setting aside the 'boo hoo, the Internet is becoming a bunch of walled gardens' arguments, when rational people have conversations about how to make the Web actually usable and not 95 percent piracy, spam, and fraud, almost every discussion starts with the proposition that there is no other realistic option but to chuck the whole thing and start over."
Of course, the Web should be in a state of "war." When have things been any different? It's a hub of innovation, competition, and constant change, and I think we all knew that already. The barrier to entry is low enough so that if there's a glaring problem with something, users will flock to whoever can create a better alternative. In fact, O'Reilly brought that up on Tuesday, when he talked about expensive in-car GPS navigation systems.
"The turn-by-turn directions from TeleAtlas cost $99 [on the iPhone], but Google is giving it away for free. This is a natural kind of extension for Google. I don't think Google is being evil here by being disruptive," O'Reilly said. "That's a massive user win, even though it is incredibly damaging to some existing companies and some existing business models. When Google offers free speech recognition, [that would be] an amazing win."
Is that legitimate innovation? Yes. But let's hope the "win" doesn't stop there. If Google manages to throw a sucker punch to Apple, Microsoft, or whoever else by offering something once-pricey for free, I should hope that the rest of the industry makes sure that it doesn't grow too complacent.
So let's get this straight: monopolies are bad, unless they're "nice" ones on behalf of companies that extol the virtues of Razor scooters, wheatgrass smoothies, and lava lamps. Competition is great, as long as everybody's nice to each other.
Doesn't quite make sense to me. But, hey, it's his show.
Editor's note: This is part of a series of stories about the recession's effect on the tech industry.
Robert Mullins, who covered servers and software for 10 years, competes with bloggers who have less experience but will work for less money.
(Credit: Robert Mullins)News gathering and job hunting during a down economy aren't unalike, says longtime technology industry reporter Robert Mullins. They both require spending inordinate amounts of time trying to get people on the phone, trolling the Web for leads and swallowing lots and lots of rejection.
For most of the past decade, Mullins covered Silicon Valley, writing about servers and open-source software at publications like Software Development Times and NetworkWorld. Like most seasoned reporters covering the tech sector, it meant always working with a safety net; 401k, health insurance, and steady pay.
Mullins is on his own now. A staff reduction in August at the publication he worked for has meant that the 53-year-old still covers servers and software, but now gets paid by the story. Mullins has been forced to work as a freelancer. Say goodbye to the salary and the 401k, and he pays for his own health insurance. After working 30 years as a reporter, Mullins and other journalists like him find themselves caught between tectonic shifts occurring in the economy and tech journalism.
In a sagging economy, one of the first cuts U.S. companies make is to their advertising budgets. Anybody who has ever worked in media knows that when ad money dries up at newspapers or trade publications, pink slips start to fly. And now heap on more bad news: at the same time traditional print publications face an ad-revenue downturn they also are seeing unprecedented competition.
While blogs and tech publications such as Gawker Media and Wired.com have also laid off employees, Web-only publications continue to snatch away readers and ad dollars from traditional outlets. Many blogs keep costs down by filling their staffs with younger writers. The new generation of reporters, who probably would prefer the term bloggers, may lack reporting experience, but often have extensive hands-on experience with the subjects they cover. They also seem well equipped to handle some of the new job demands in tech journalism, such as filing video stories and podcasts and writing shorter but larger numbers of stories.
In this climate, some old-school journalists struggle to fit in.
"I was up for a job...and I was considered a strong candidate," Mullins said. "But later I found out they hired an entry-level employee. Of course entry level means you don't have to pay them a lot...I've been doing this for a while and there are younger people out there that will work for less and who are quick learners and have a lot of energy. They also don't have the same salary demands as more experienced reporters. They get some of the positions that I might have otherwise qualified for."
A Web-only world
It's not hard to find examples of how the Web and blogging have changed traditional journalism. Most of the country's major daily newspapers have asked reporters to blog at the same time they write for their print editions. InfoWorld, a stalwart tech magazine for three decades, dropped its paper edition and went Web-only last April.
The century-old Christian Science Monitor also scrapped printing newspapers on a daily basis. Starting in April next year, the Monitor will publish on its Web site and offer weekly print and e-mail editions.
But attempts by print publishers to cash in on the Web have met with mixed results. Print publishers are losing advertising revenue faster than they can make the losses up with Web ads. To reduce costs, print publications have borrowed ideas from Web-only competitors and tried to remake themselves into speedier, sassier news shops.
"The rise of the blog economy is replacing traditional coverage by reporters who ask questions and investigate things," Mullins said. "While some of the legacy print publications are also trying to do some investing in things like blogs, and video and using surveys to interact with audience, some of their more ambitious plans I think are going to take a while before becoming stable."
Well, there's plenty of freelance work
After getting over the shock of his own layoff, Mullins realized he was fortunate in some ways. First, there's plenty of freelancing work available. "The good thing is that there are all sorts of freelance opportunities out there because of the number of technology blogs or business blogs that pay reporters by a per-story basis," Mullins said. "But whether there's enough to replace a full-time salary is another thing. You just keep knocking on doors."
One part of Mullins' day is spent pitching story ideas to editors and writing; making sure money continues to come in. The other part is spent sending out resumes, calling contacts to see if they've heard about job openings or tracking down editors about giving him work. With a mortgage to pay on his Santa Clara, Calif., condominium, Mullins jokes that he's learning to mix Starbucks coffees as a "just in case."
The arduous process can sometimes get him down. "It can be frustrating and depressing to be sending e-mails and getting nothing back," Mullins said. "I have friends who help encourage me."
As for the future of tech journalism, Mullins is confident that the public will always crave news.
"The tech industry is still so vibrant and constantly changing," Mullins said. "There is always going to be a need for someone to report the news. If the publishers can figure out the economics, there might be some good prospects."
Next in the series: Finding hope in the iPhone App Store
MOUNTAIN VIEW, Calif.--The national and global economy is suffering something between a setback and a meltdown, but Google's top executives said Wednesday they're bullish about Silicon Valley's economic prospects.
Google CEO Eric Schmidt
(Credit: Stephen Shankland/CNET News)"This is the sixth or seventh cycle I've seen in Silicon Valley. I think we're better positioned than ever," Chief Executive Eric Schmidt said of the Silicon Valley region during a meeting with reporters at the company's headquarters here.
Schmidt specifically said the venture capital community is more sophisticated and that a Northern California start-up can reach scale more easily. "Young people out of Stanford and Berkeley--they're able to get money early. Google is one of a long procession," he said. "I think it's completely due to the weather," he quipped, saying people get hooked on Silicon Valley's nice climate.
"I don't think there's anywhere else you'd rather be," added co-founder Larry Page. "We're investors in Tesla, for example. It's pretty amazing you can drive an electric car with a 220-mile range. Those are produced here. I don't see those anywhere else in the world."
With the credit crunch spreading from banks with subprime loans to hallowed Wall Street firms and beyond, the U.S. government has been bailing out major companies, notably with an $85 billion loan to insurance giant American International Group. On Thursday, central banks from the United States, Japan, Europe, England, and Switzerland began pumping out money to try to contain the crisis.
Plenty of cash
Regarding Google specifically, though, Schmidt said the company is in a good position to weather the economic storm. He gave himself some wiggle room, in case things get truly disastrous.
"The company has a very large amount of cash in very, very boring and secure investments. That was the right decision then and especially the right decision now. As a company, we're fine," Schmidt said. "The things that could affect us is if it affected our customers...If this debacle caused a huge change in economic situation, that could affect us."
Google co-founder Larry Page
(Credit: Stephen Shankland/CNET News)So there are signs of cold feet among the advertisers from which Google gets the vast majority of its revenue? Tim Armstrong, Google's president of advertising and commerce for North America, wouldn't answer specifically.
"In general, it's something we watch closely, but we've seen in multiple cycles we've gone through (that) as companies get concerned about what they're spending and how they're spending, they move toward more accountable platforms," Armstrong said. "Some companies have shifted even more money to the digital landscape. We have one of the most transparent, accountable models in the digital landscape," and Google is working to bring its ad system to newspapers, TV, and radio too.
There goes another bubble?
Although he's bullish overall, Schmidt said the current investor excitement around new Internet companies--he deliberately shied away from the term "bubble"--is waning. "There's clearly some slowdown in Web 2.0," Schmidt said.
That's fine with co-founder Sergey Brin. "The worrisome disease states of Silicon Valley were the bubbles. When it's too easy to get money, then you get a lot of noise mixed in with the real innovation and entrepreneurship," he said. "Tough times bring about the best."
Going green and clean
One current reinvention of Silicon Valley is its adoption of green technology such as new solar-panel technology; Google itself has invested in several renewable-energy start-ups. Page pointed specifically to geothermal energy as technology that could help in many areas around the world.
Google co-founder Sergey Brin
(Credit: Stephen Shankland/CNET News)"If you dig deep enough, you get heat," Page said. "We need to make drilling cheaper," though when Google looked for start-ups trying to reduce the cost of drilling, it found only about 10 people working on the area.
Schmidt added that green and clean technology start-ups are in a business that resembles earlier phases of Silicon Valley entrepreneurship.
"Clean tech is a little more like the semiconductor business. The amount of capital required to do it is significantly higher than in the IT (information technology) businesses I've been involved with. The economics for clean tech may not be the same as the Google economics. There are higher capital costs, longer supply chains, inventory risks, more manufacturing, and also the need to build that expertise in companies," Schmidt said. And though manufacturing costs also can be high, science and research can be done in Silicon Valley, and manufacturing elsewhere, as happens with the computer chip business, he added.
Disclosure: Stephen Shankland is married to a Tesla Motors employee.
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