Paradigm shift: how the web has come of age

MySpace and YouTube are creating a whole new way of looking at the internet that is catching some companies flat footed

There is an enduring disconnect between Telecom and its broadband customers, and it really shows up when you ask the company’s managers what they think people use the internet for.

Their answer is usually along the lines of, “Surf the web, check email, stream some video clips, maybe play online games”.

This view is reflected in the design of Telecom’s current broadband offerings, and how they’re marketed, too. It’s been like this for years now, which is one reason Telecom still comes up with broadband plans featuring a measly 200MB data cap, for instance. And this is before we even get to e-commerce flops like Ferrit, which, despite millions of dollars being spent on it, has failed to make a dent in Trade Me’s market share.

Internet entrepreneurs and infrastructure workers already know how outdated and foolish Telecom’s notion is. They’ve seen the web evolve at break-neck speed, as vast numbers of users have flocked to it with new ideas that involve user participation rather than mere passive consumption of content.

This concept is often referred to as the “social network”. It has taken off like a rocket and the phenomenon shows no signs of abating. If you’re a net entrepreneur, any business idea now has to have the social factor or it will go nowhere — it has to be beta too, but that’s another story.

How big is the social factor then? Let’s look at MySpace, which, in case you’ve missed it, is “an online community that lets you meet your friends’ friends.” However, this rather prosaic description doesn’t go anywhere near explaining the MySpace phenomenon and why it’s so popular.

And popular it is. The figures for MySpace are astounding. TechCrunch blog editor Michael Arrington put together some numbers recently that show MySpace now has 75 million registered users, with 15 million unique logins every day. The site is growing by an amazing 240,000 users a day. This is up from 150,000 in November last year, says Arrington — or growth of 60%. And total user numbers have grown by an astounding 88% since November.

However, the number that really bowls one over is the page views each user generates. According to Arrington, it’s nearly 30 billion a month. Yes, that’s billion, not million.

MySpace users are a sticky lot, too. When they get to onto the site they stay there. It’s where they can not only find social partners, but jobs, too. They can also check out the classifieds, read blogs, watch new films and listen to music — MySpace is becoming popular as a launch pad for young movie-makers and musos.

MySpace is a compelling platform, where users can do what they want rather than have content foisted on them. Sure, many of the MySpace pages are insanely overloaded, trite and feature rather dubious content. But so what? MySpace fills a need, and for a huge number of people as well.

Those who derided Rupert Murdoch when he paid US$580 million (NZ$934 million) for MySpace last year are now having to eat their words. News Corp is now faced with the rather delectable problem of deciding what a reasonable per-giga click rate for advertisers should be, at a time when most online media are still dealing in per-thousand clicks.

With more users than most medium-sized countries, MySpace is an interesting case study for internet entrepreneurs and infrastructure managers looking to create similar platforms, and the networks that feed off them. MySpace is already said to have some 3,000 web servers and 100 cache boxes for serving up content. Its storage area network spans over a thousand disks, and data volumes on MySpace are measured in hundreds of terabytes.

Even though the figures above are staggering, they will in all likelihood be dwarfed should MySpace manage to enter the Chinese market. However, what is holding it back isn’t just the political difficulty of operating in a Communist country, but, interestingly, the poor state of the internet in a country that has just two major telecommunications providers. Does this lack of internet choice, and how it is holding back business, seem a tad familiar?

I’m reasonably optimistic that social networking businesses will develop locally, despite the rotten internet service that’s been foisted on us as a result of Telecom’s deluded strategy. Trade Me has shown it’s possible to get around these damaging limitations and, with luck, the overseas competition won’t result in there being no more room in the market.

But, you have to wonder what might have happened if Telecom had employed some visionary managers interested in growing the market, rather than holding it back with the aid of confusing marketing. Might New Zealand have had mini MySpace perhaps?

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