Technology

 by Brendon J. Wilson

Next Gen Open Source?

Like a few other geeks, I’ve lately been reading Paul Graham’s excellent Hackers and Painters. Most insightful, especially in light of the success of Google and Flickr, is Paul’s views on the advantages of “weblications” over traditional desktop software. Recently, I started wondering about how the transition to web-based services would ultimately affect the Open Source movement.

I’m not alone in this line of thinking, of course. I rarely am. There was a discussion recently on the nature of Google’s contribution to Open Source, in light of an accusation by Krzysztof Kowalczyk that Google (and any other large web-based service) was essentially bleeding the Open Source community for cheap code, and giving little back in return. While Adam Bosworth’s response highlighted the value that people got for free from Google every day, I think he did evade the central thrust of Kowalczyk’s argument, namely that an individual company’s incentives prevented it from contributing back to the Open Source community except when absolutely necessary.

It does illustrate the main hole created by ambiguity in the licenses used to protect Open Source or even “Open Culture” works. Because these licenses are ambiguous about the meaning of “derivative” works, it opens a gap through which companies can fit in order to carve out a commercial enterprise (and I’m not saying that’s necessarily a bad thing). For example, a company can build a web-based service on top of Linux without having to contribute back to the project or release their code under the GPL. This is because creating their web-service didn’t require the company to actually create a “derivative work” of the Linux kernel, only to build an application on top of the operating system. A similar hole was highlighted by the flap sparked by the Trademark blog a few weeks ago when Martin Schwimmer expressed concern that Bloglines was violating his site’s Creative Commons license by aggregating the blog’s RSS feed.

The problem lies in the fact that in a world where the boundaries between applications grows ever more fuzzy, the original intent of Open Source licenses, such as the GPL, is undermined. The original intent of the GPL was to ensure that those who benefitted from an Open Source project where equally obligated to make a contribution back into the community to foster continued innovation and improvement. With that feedback loop broken, companies building web-based businesses will continue to do the only smart thing they can do: exploit the hole, and segment their applications such that they are only obligated to contribute back the minimal amount possible to those Open Source projects to which they make modifications.

On the other hand, I’m not sure we necessarily want to close this hole – doing so may only defeat the rapid adoption of Open Source technology, and prolong the profits that companies can wring out of customers when there is no other viable alternative. In the end, it may be more beneficial for the Open Source community to let these companies subvert this hole in the feedback loop, if only to use it as a clever loss leader to ensure continued rapid adoption, create developer loyalty, and, ultimately, garner protection from those companies not using Open Source who wish to use patent infringement lawsuits or other means to eliminate it as a competitive threat.

in Business / Culture / Technology 0 comments
 by Brendon J. Wilson

Sell-Side Advertising

A number of bloggers have been ruminating the future of advertising (most notably Fred Wilson, John Batelle, Seth Godin, and Adam Rifkin), mostly inspired by Ross Mayfield’s “Cost Per Influence” post from eons ago (think July – that’s, like, forever in the blogosphere). I thought it might be time to weigh in on their concept of “sell-side advertising” (closely related is Greg Linden’s discussion of “intent marketing“). The idea at the core of “sell-side advertising” is intriguing: what if advertising became less about companies and advertisers pushing out advertisements to people who didn’t care about what they’re selling, and more about allowing influencers to connect products with the people who actually want them?

From my understanding, the sell-side advertising concept is part Google AdSense and part Amazon Associates. On drugs. Batelle gives a good summary:

Instead of advertisers buying either PPC networks or specific publishers/sites, they simply release their ads to the net, perhaps on specified servers where they can easily be found, or on their own sites, and/or through seed buys on one or two exemplar sites. These ads are tagged with information supplied by the advertiser, for example, who they are attempting to reach, what kind of environments they want to be in (and environments they expressly forbid, like porn sites or affiliate sites), and how much money they are willing to spend on the ad.

It’s a great idea – let the publishers (such as bloggers) advertise to their circle of influence and get paid on performance (read: actual sales). No performance, no money! Like Amazon’s Associates, there’s little incentive for someone to create a page full of links without any value-add. Like Google AdWords, it levels the playing field, offering smaller advertisers the opportunity to reach their market without breaking the bank. Even better, it offers smaller advertisers a calculable ROI – it’s no longer a crap-shoot like it is with Google AdWords (after all, even with the best click-through rate in the industry, isn’t the click-through rate still abysmal?).

From the publisher’s point of view, this is also an especially appealing model. First and foremost, I believe the improved ability of such an advertising model to provide measurable results (in terms of actual dollars, not just “eyeballs”) would result in improved revenue for the publishers themselves – far better than per-click advertising. Heck, just compare how Amazon referral fees outweighed my author royalties!As an added bonus, such a model would put advertising control back in the hands of the publisher, thus avoiding the puzzle of Google Adwords that are totally unrelated to the content on the page.

As Seth points out, this model is already out there in the form of an offering from Commission Junction. I recall signing up for a Commission Junction account ages ago when I was exploring ways to boost my book sales – I believe Commission Junction was providing the affiliate program for Barnes & Noble. It was horrible. Bad user interface, and difficult to actually find the items I wanted to sell. Anyone know if it’s improved since last I tried it (early 2002)? Perhaps if they improved the interface and created plugins for blogging tools to streamline the process of adding affiliate links, they’d really have something.

That said, there are still some issues with such a system. For one thing, I think it’s safe to say that a large part of the blog world will be uncomfortable with the idea of the commercialization of the blogosphere. Scoble won’t even use affiliate links. And Canter (God bless him for trying stuff) probably would have been burned at the stake if he showed up at Bloggercon with his get-paid-to-blog schemes.

A shift to pure pay-for-performance advertising might have some interesting ramifications. As Hugh MacLeod loves to point out:

“But that’s always been the trouble with advertising. The money has always been in the dreck. Because the good stuff advertises itself.”

While I agree, I think the problem we’re currently facing is that there’s just too much good stuff. If the advertising market moves to a model where publishers only choose advertisements that interest their readers (if only to maintain their street cred and fend off accusations that they’re being a shill), some products’ advertisements will never see the light of day. After all, some products will never invite a religious following that will build buzz – those things are called commodities. Nobody cares enough about, for example, toothpaste to write about it (unless, of course, they screw up royally), much less participate in some Crest-sponsored affiliates program.

And that’s OK, because these products are overpriced anyway, given they have little true innovation to justify their price in light of their low input costs. But therein lies the paradox – as publishers shift towards the more lucrative world of pay-for-performance advertising, commodity producers will find it difficult to even buy themselves an audience. The question in my mind: will this drive up the price of old-world, pay-for-no-guarantee-of-performance advertisements to new heights, or will the dismal economics of these commodity products prevent them from being able to gain an audience at any price?

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