It's this or the Terminators...

Some ideas aren’t meant to make money. That’s the problem with Facebook and Myspace and now Yahoo, apparently. Some ideas do not produce the profit margins that are sustainable in the old world economy. But instead of adjusting the map, the companies adjusted, largely for the worse.

And if disappointing profit doesn’t point to the end games, the exponential increase in computer storage will. While a 10 gigabyte hard drive wasn’t cutting edge in 2000, it was certainly huge. Now a 1 terabyte hard drive is not considered cutting edge, but it’s considered a good chunk of space.

What will the next 10 years bring? I think it will bring a new version to the web. As server bandwidth and storage increases, we’re going to be in for such a shock.

Because some smartass is going to put ten grand into a server. And he or she is going to put basic networking code in, exactly as Facebook does, exactly as Myspace does, to help you blog and sort and catalog your many friends, passer byes, and pity friends.

And he or she won’t accept money for it.

I know, I know, it sounds like herecy, but think about it. Everything that drove Facebook’s or YouTube’s mass appeal was done on the cheap. And there will come a point where the operating costs of the necessary server will creep closer to zero. As that happens, and I believe it will, that next generation will find itself drawn to the moth to the flame. Look how easily and readily we have embraced email, texting, online conversations and blogs. As the hurdles in bandwidth are slowly overcome, the lasting thought of a megacorporation holding the keys to your favorite entertainment is going to be less and less appealing. Indeed, that’s precisely what happened with the internet recently. There simply won’t need to be a justification for the upkeep of large corporations, or stock holders who care more about their dividends than the product. That way of business is not sustainable on the internet. Hell, it’s not very sustainable outside of the internet, really, but that’s another story.

The point of the matter is the concept of the world on a single server (or collection of linked servers) is fast approaching, and when the costs are later driven down the attempts of Facebook and YouTube to capitalize in the multi-billions will seem laughable.

This current generation sees the bloat of the music industry, how their expectations for profits are not realistic. We see that there is profit for the musicians and various media types to make money, but I can’t think of a single person who thinks that the sheer size of the music industry can carry its own weight any longer. Storage and bandwidth outpaced their sales models.

Websites carry that same potential, and businesses that find themselves working against comsumer interests with things like advertising clutter, obtrusive data tracking, and the cessation of appealing services will find themselves doomed by the next rond of technology. The talents of Silicon Valley and beyond have the talent to take the reins and pave a road for the next generation of talent. But here’s the thing. All those innovators are working on how to make shareholders happy, how to make advertising more effective. That’s what makes the news now. Unless there’s a paradigm shift in how they do business, efficiency will doom them. It doomed AOL, and it’s been a problem for Yahoo of late. There’s no reason it won’t happen again.