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03/01/2008

The fuel of the Internet

While bloggers and print journalists lock horns over media hierarchies and journalistic standards, Web 2.0 is making Google a noiseless fortune. By Robin Meyer-Luch

Digitalisation is an inherently cyclical business. It comes in waves. Its domestication always follows the same procedure: a new bit of technology arrives which opens up a new realm of possibilities. This uncharted zone is then hyped full of potential. Its borders seem near indiscernible. Eventually, experience fills the realm of possibility. The technology's comparative advantages gradually assume contours and initial assessments are reassessed. In the end, what remains is a realistic picture of the new application.
In the late autumn 2007, the realm of new possibilities known as Web 2.0 definitively entered verification phase in Germany. One of clearest indication of this came in the form of editorials by Frankfurter Allgemeine Zeitung publisher Frank Schirrmacher (here) and Bernd Graff in the Süddeutsche Zeitung (here). Both identified a sufficient waning in 2.0 euphoria to wager a vociferous swipe at any last traces of idealisation.

At the end of October, Frank Schirrmacher gave a speech that was intended as a hymn to the increase in value of print journalism, but actually focused principally on the journalistic inferiority of the Internet. To Schirrmacher the web is a hotbed of journalistic haste, impassiveness, and superficiality. Its "iconographic extremism" threatens the culture of writing. From the depths of decentrality rises the "infection" of poor content. The net is a looming hole in the institutional fabric of journalism, opening the doors to all and sundry and relativising the authority of traditional quality journalism. Schirrmacher responded to the protests of online journalists by saying he merely wanted to express his preference for a coexistence of newspapers and the Internet (here). But he obviously also fancied himself as a juggler of culturally conservative resentments vis a vis the Internet as media.

In early December, the deputy editor-in-chief of the online edition of the Süddeutsche Zeitung, felt the unexpected need to unleash a tirade against the "destructive forces of the free-opinion market" on the Internet. In the "faceless and characterless 'many-to-many' communication on the web," knowledge is "trampled into a grass-roots democratic mush." The "staggeringly unsuspecting public" has been taken in by the idiotic promises of decentralized information, when in fact web forums have little to offer except superficial knowledge, vulgar remarks, and slander. Graff, however, gets caught up in a breathtakingly structural-conservative, know-it-all attitude, which prevents him from making any kind of sophisticated contribution to the debate. For him, the reversibility and decentralization of the Internet are the breeding ground of brazen user-empowerment, serving solely as an end in itself and providing no sort of edification whatsoever – a kind of user-generated discourse delirium.

Graff, like Schirrmacher, is playing on the anxiety of journalism's entropic death on the net. They fear that "good journalism" could perish in the fever of participation, or, at the very least, lose its significance. What is most certainly a difficult path to a new digital information economy is reformulated as a history of loss.

Such figures appear cyclically. At the beginning of the 1990s, the American media critic Neil Postman got worked up over the deterioration of the "immune system of the information system," which would result in society being flooded with context-free information (technopoly). By the end of the '90s, the German political scientist Bernd Guggenberger had conjured up the "digital nirvana," in which "waste data" should be disposed of according to the principle of focusing solely on what is worth knowing. Such information-economy anxieties eventually dissolve as new filters, new hierarchical systems and new coexistences establish themselves.

In the meantime, the discourse economy of Web 2.0 continues to trickle steadily into the public realm. The net breeds clearly defined "issue publics" which might only be visible on second glance, or with a certain technological savvy. For instance, within just a few weeks, a 21-year-old reached over half a million viewers on YouTube with a video (here) expressing his views on misleading and false TV reporting on computer games. By the time the mainstream media caught on, the video had already been viewed over 200,000 times.

In traditional media, content is first filtered and then published. On the Internet, things are often the other way around. The result is a complex and confusing plurality with a coherence that frays at the edges. Such a media reality is sometimes difficult to endure and frequently seems psychotic. Nonetheless, it will have to be endured. The dilemma facing the new technological constellation is that it provides better and therefore also incomplete knowledge. This cannot, however, be blamed on the medium, but is inherent in the logic of knowledge itself.

The extent to which the Internet has already changed our understanding of journalism was shown by the nomination of Stefan Niggemeier in his funtion as a blogger (here) as German "Journalist of the Year". The jury's decision indirectly echoed the widespread message about the relationship between blogs and journalism, namely that a blogger well-versed in the profession can uphold the journalistic ideals of steeliness, perseverance, and single mindedness at least as well as his colleagues in traditional publishing. It doesn't make a difference if one earns little any or no money in the process. It also doesn't matter if it doesn't reach more than 5,000 readers daily. What matters are the results. The decision has thrown the concept of journalism wide open, and rightly so.

And yet over the course of 2007, there was clear drop in interest in Web 2.0 ideas – it has almost assumed an air of normality. It is impossible to prevent a degree of boredom from setting in. The big star of the web's second wave remains Google. According to the most recent figures from Allensbach, the search machine is now used by 27.6 million Germans per week, which constitutes around 55 percent of the population of 14 to 64-years-olds. The search machine – the mother of all aggregators – has thereby become one of the most wide-ranging media sources in Germany. Only major television broadcasters have a larger audience.

By rough estimates, Google has made a turnover in Germany this year of around one billion euros – that makes 36.20 euros per user annually, or almost exactly 3 euros per user per month. The most remarkable thing is that almost no user can imagine that Google earns any money from their Internet searches – let alone 36 euros a year. Google's business model for its end consumers is "noiseless," to formulate it carefully.

The economic ideal to which Web 2.0 aspires is a "market for one." This means dealing in highly personalized goods, which possess the great economic advantage of having their prices individually determined by the readiness of the consumer to pay. This allows for the optimal exploitation of a market. This is what actually lies behind personalization and mass customization. Correspondingly, every keyword ranking in Google has its own price for advertising customers. This is technically achieved though the use of algorithms – the second great ideal of Web 2.0. Capitalism has been technically upgraded.

The technology journalist Nicholas Carr has written a very insightful text on the Google economy. He analyses the search engine and the content it makes accessible as complementary goods. There is a simultaneous demand for economic goods of this sort because they go together like fountain pens and ink or cars and petrol. Typical for complementary goods is that the demand for one item decreases when the price of counterpart increases. The manufacturers of a product, therefore, have a vested interest in maintaining low prices for their complementary products. Correspondingly Google has an equally strong interest in freely available content on the net as the auto industry has in reasonably priced petrol. Against this backdrop, the decision by both the New York Times and Spiegel to freely provide free access to their archives appears in a totally new light.


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Robin Meyer-Lucht is a strategy consultant and media journalist.

The article originally appeared in German in Perlentaucher on December 12, 2007.


Tranlsation: John Bergeron
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