Saturday, August 10, 2019

Monetizing Like Minds - Section 02

The Cost of a Free Cookie

By the 1980’s, with guidance and funding from the National Science Foundation, ARPANET was expanded into the Internet (contraction of Interconnected Network) with a global presence in universities, research institutes and even corporations. Under the official rubric of Data Science, this web of nodes led to the creation of Neural Networks and the capacity to undertake data mining. The race to dominance, particularly on the part of the US, was evident even in the language of the culture with the phrase, "master-slave", used as the preferred description for network database architecture.  

Feeding on bits, nibbles, and bytes, these networks have been likened to living organisms that can learn and grow without human intervention. Under the debatable guise of increased accuracy, their growth was encouraged to include exponential amounts of data. (“Garbage In Garbage Out”). Indeed, the liveliest debate around data gathering on the early Web was about how Cookies - bits of code that track your behavior - got that name (from Fortune Cookies, Sesame Street Cookie Monster, or Unix Magic Cookies?), not whether the code should even be used.
The commercial Web’s early retailing successes - notably Amazon and eBay - remain sturdy exemplars of selling online done well. A key to their continued success is personalization, made possible by something called the “cookie”: a small text file, placed in your browser by the Web site...that tracks your activities as you go about your business on the Web, reporting back what it has found to one or more among thousands of advertising companies, most of which you’ve never heard of.
The Intention Economy
Doc Searls - Harvard Business Review Press 2012
Influenced by the insights of Norbert Wiener, a mathematical genius and founder of cybernetics, first generation Netizens in the 1980’s and 90’s were playful and somewhat naive (myself included). They were cybernauts not cryogenic oligarchs. They created an Open Source model of software development that encouraged code sharing. They constructed a dutiful Gopher that assisted Archie, Jughead, and Veronica in searching vast data libraries on our behalf. From a cybernaut perspective, the humane potential of the World Wide Web was as unlimited as its name suggests. The opening paragraphs of Fred Turner’s essay, Machine Politics, in Harper’s January 2019 edition recounts the hopeful exuberance of the time.
“The Goliath of totalitarianism will be brought down by the David of the microchip,” Ronald Reagan said in 1989. He was speaking to a thousand British notables in London’s historic Guildhall, several months before the fall of the Berlin Wall. Reagan proclaimed that the world was on the precipice of “a new era in human history,” one that would bring “peace and freedom for all.” Communism was crumbling, just as fascism had before it. Liberal democracies would soon encircle the globe, thanks to the innovations of Silicon Valley. “I believe,” he said, “that more than armies, more than diplomacy, more than the best intentions of democratic nations, the communications revolution will be the greatest force for the advancement of human freedom the world has ever seen.”

At the time, most everyone thought Reagan was right. The twentieth century had been dominated by media that delivered the same material to millions of people at the same time—radio and newspapers, movies and television. These were the kinds of one-to-many, top-down mass media that Orwell’s Big Brother had used to stay in power. Now, however, Americans were catching sight of the internet. They believed that it would do what earlier media could not: it would allow people to speak for themselves, directly to one another, around the world. “True personalization is now upon us,” wrote MIT professor Nicholas Negroponte in his 1995 bestseller Being Digital. Corporations, industries, and even whole nations would soon be transformed as centralized authorities were demolished. Hierarchies would dissolve and peer-to-peer collaborations would take their place. “Like a force of nature,” wrote Negroponte, “the digital age cannot be denied or stopped.”
From the egalitarian open-source worldview of Netizen economics, “free” was the only appropriate admission fee to charge for the benefits of cyberspace. But this zero price point did not deter marketing types who well understood that “free” can also be an irresistible lure. From a capitalist ROI (Return On Investment) perspective, free gifts were a sure way to acquire hordes of loyal customers. So, a technology intended as a communications defense in war time became a corporate marketing offense in peacetime.


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