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Combining a few thoughts in my head together has revealed some truth.

I've been arguing that wikis are so easy to build, they are the analog of corkboards that exist only as a vehicle to sell cork, the cork being Web hosting space. Web servers are the real power of the net because they are the underlying architecture than actually physically constitutes the net. Moreover, Web servers are active on the network in a way that land is merely passive.

I also know that the underlying pillar of our capitalist system is our real estate system, where every citizen is expected to own real estate or something equivalent. The theory of real estate is not what you do with the real estate that is important, but simply owning the land. What you do with the land is how you pay off the interest on the debt incurred buying the land in the first place. That is, since Enclosure, we farm land because it generates enough revenue to pay the interest on the land, not because we are farmers. We build rental buildings for the same reason.

GlobalMedia? companies are similar in the sense that the real business of the music industry, of television, of movies is their physical presence. CDs, television sets, movie theatres are the real value. The content that flows through these media only exists as an excuse to build more physical material.

Self-actualized people are also like real estate in the sense that their personal goals is what they focus on advancing; everything else is only a means to fulfilling that wider goal. They work for the money to achieve their objectives. Athletes are a good example.

On the net, then, if Web servers are real estate, the goal is to own as many Web servers as possible. Google is doing a very good job. (cf. http://blog.topix.net/archives/000016.html) Their search engine has been their primary vehicle to grow their collection of servers. Once they have their collection of servers, they can start doing other things with them such as Orkut and Gmail and whatever, but these also fulfil the same purpose which is (sustainably) building more servers.

The company that can sustain the most servers wins.

Like the land rush of the Enlightenment, there is a seemingly infinite amount of land out there as you can always build or acquire new servers. But eventually there will be a saturation. The interesting thing is that it's clear we as humans can continuously generate new real estates in the form of media. -- SunirShah

I'm not sure I agree. It seems plausible on the surface - servers are what make the Web go round, so whoever controls them controls the Web. Google's a pretty good example: with massive quantities of servers, they can offer things faster through Google cache, Gmail, etc. faster than even Akamai can. (There's another example of a company in the business of Web servers, though they go about it more sophisticatedly.) And there're startups popping up that offer remote storage of...everything.

But such "real estate" is tied to the client-server paradigm. Napster and Gnutella nearly put a dent in that a couple years ago; they failed because residential bandwidth is too low for commercial use, and so people would only use them to download things they shouldn't be downloading. Newer systems like Chord and Kademlia and BitTorrent? do a bit better, but it's still far more effective to use massive webserver farms.

However, I've got a friend whose dad works at Verizon. He says the hot buzz there is residential fiberoptic lines. There're fiberoptic cables right down my street, and many of the other streets in the neighborhood. We just can't tap into them because optical switches are so pricey. I've heard that there's been intense research lately in bringing optical switches down to commercial prices.

Imagine what the Web would look like if every consumer had the same bandwidth as Google.

Beyond that, why stop at the Web server when you think of what's "land" on the Internet? Isn't it really the routers that are the real NetEstate? A Web server is a destination; it's hard to monopolize destinations. It's the whole CommoditizeYourComplements problem: you can't really make a profit off a commodity. A router, however, is infrastructure. If you own the backbone of the Internet, there's no getting around that. I think that's more like "land" in the traditional economic view. -- JonathanTang?

Routers as well. The more physical infrastructure you own of the Internet, the better you are. If you think of it this way, prior to the Internet, media companies had proprietary distribution networks, meaning they controlled--more or less--what content you had access to, which drove up the value of that content. But content has always been primarily a motivational factor to purchase hardware. So when the Internet came along and socialized distribution--as now the distribution network is PeerToPeer, or at least router-to-router--companies that relied on proprietary distribution networks were in economic trouble.

A glaring counter-example is of course the booming software industry, particular Microsoft that grew on the notion that software was separate from hardware, and that indeed the software was more important. Of course, most software is not really content, but that's another argument.

But there has always been a lot of money to be made in non-real estate industries. After all, you have to do something with that land. Building contractors, farming equipment, McDonald's are all businesses that operate further down the ValueChain.

The important difference between NetEstate and real estate is that real estate can never become a commodity since we cannot make more of it, whereas NetEstate is already a commodity. And so the interesting thing is not owning some servers and wires, but in aggregating, connecting, and driving up the value of that aggregation of a giant mass of servers. Hence things like Gnutella and SetiAtHome? and Google.

I am just thinking it will come down to which organization has the most servers, for some definition of "most". (Closer to most power generated by those servers.) However, your point that the client-server paradigm is limited is noted. Maybe that organization doesn't have to be a traditional service company, but simply a NetworkStandard? After all, what made the Internet so powerful was the InternetProtocol's flexibility in bringing in existing networks, and thus rapidly increase the number of people on it with the least amount of effort. MetcalfesLaw then encouraged more people to join until it became this juggernaut we have today. -- SunirShah


Another view would be that net-estate isn't servers but links. Both in-links bringing people and attention to you and your space, and out-links which are rewarding people for coming, and encouraging them to come again. -- PhilJones

I'm not sure links are really estate. That would argue that traffic is valuable, but the SlashdotEffect says otherwise. Sometimes you don't want to have a lot of inbound links, and that will drive up your value. The concept of cool is typically about obscurity, not about popularity. Further, if you are just a middle-man, reorganizing links for other people, your business is vulnerable since your links are easily replicatable away from you since the CompilationCopyright doesn't protect such works currently. Even so, the concept of CopyrightLaw is an attempt to build an artificial property system, but it fails miserably because the estate is only based on social conventions, not something intrinsic. If you mean links in a social sense, that's not true either, since you cannot sell your PersonalRelationships to someone else. While they may be of value, they are not like real estate.

But I will agree links are critical: in traditional real estate, the mantra is "location, location, location," and on the network, your location is your situation in the web of links. It's not that you want to be highly linked, but you want only links from value generators and none from value destroyers. Similarly in real estate, you want to be near or on good things (minerals, food, lumber, energy, SacredSites, etc.) and away from capital destroyers (e.g. toxic waste dumps). -- SunirShah


One could argue that it isn't Web servers but Web services. I don't care how many boxes Google has, only that they provide a valuable service. --anon.

Services are what's built on the land to finance them. McDonald?'s corporate strategy is to buy up the most valuable land in America and finance those acquisitions with their restaurants. When McDonald?'s the business goes under, they will have real estate as their underlying equity. It's all about equity. This is covered in the pulp business strategy book, Rich Dad, Poor Dad. -- SunirShah

That's what allowed KMart to take over Sears. Their real estate was worth more than their business.

But there are plenty of counterexamples. Amazon's (or, for that matter, Google's) corporate strategy is to buy up small parcels of fairly cheap land, load it up with cheap servers, and finance these acquisitions with their services. The "center of gravity" has been moved up from RealEstate? to NetEstate.

That's what I'm trying to get across above: shifts in technology create structural shifts in the economy. Who's to say that the next major technological development won't shift the center of gravity from servers to links? Or shift it from links to brains? -- JonathanTang?


If you mean links in a social sense, that's not true either, since you cannot sell your PersonalRelationships? to someone else. While they may be of value, they are not like real estate.

I disagree. That's the main economic evolution going on today. Sometimes under the name AttentionEconomy?. Or GonzoMarketing? or BusinessBlogging? or Business Networking. People are continuously finding ways to trade off their social links. Yep, you can't sell them directly like a piece of land, but you can get jobs, get early access to important information, influence key people etc. etc. through investing in and manipulating your social links.

I do agree that it is "quality not quantity" that's important though. As with RealEstate?. -- PhilJones

Here is a paragraph I might add to the headword:

It is held by some that NetEstate was in the form of domain names. But SemanticSpace doesn't behave like real estate because you can create an infinity of new land just by conceiving it. You can always add one, as they say. The problem with banning spam domains makes this clear, as it is relatively costless to continuously generate new domains. Sure, domains become valuable if they are well known, popular words or brand names, but that is the nature of SemanticSpace--it is an AttentionEconomy? rather than the capital economy but that is because the space is infinite. It's the same model as real estate, just in the extreme case of infinite land, the result is an AttentionEconomy? simply because there is more supply than demand. The scarcity in such a model is not the land (it can't be), but the buyers. And thus the economic model inverts, and the people become the capital resource.

I still think it is important to see all levels of the network as opportunities for control and exploitation and therefore profit. -- SunirShah

Agree, all levels are opportunities for monetization. But it seems like "NetEstate" as an idea is the suggestion that all other levels are secondary to, or derivitive of, the fundamental wealth which is disk-space on servers.

Here's what you said which made me think that you think that land is the foundation of other wealth in capitalism : I also know that the underlying pillar of our capitalist system is our real estate system, where every citizen is expected to own real estate or something equivalent. The theory of real estate is not what you do with the real estate that is important, but simply owning the land.

Now, I find that surprising. Is the wealth of Ford, General Motors, Coca Cola, Philip Morris, Toyota, Honda, Sony, Microsoft etc. really in real estate? Even Macdonalds might be benefiting from ownership of land more due to it's power to enforce control over the franchisees than because they are "renting" it in any conventional sense.

And translating this theory to server-space really seems very strange. Unlike land you can slot bigger hard disks into your servers. They really are making more gigabytes; every week. OTOH, although SemanticEstate? (or homesteads on the NooSphere) appears potentially infinite, there are actually restrictions on how quickly you can grow it. That is limited by attention and maybe other factors.

But that isn't entirely what I mean by AttentionEconomy? as an example of how you can trade social-links. You can also turn personal connections into other personal connections. I know A, and B wants an introduction to A, so I can provide B with it, if B is willing to become my friend / ally / help me out by introducing me to C, etc. This is what Bard and Soderqvist in NetoCracy call imploitation and is one of the two economic principles of their netocratic economy. The other is the more familiar exploitation which is about turning attention and connections into cash (by getting paid to endorse or learning about a business opportunity from someone with insider knowledge.)

OTOH, I'm not sure how much we're really disagreeing here. You seem to be saying connections / links are valuable but can't be immedietely converted into cash (exploited). I'd agree, but I think that the economy is already visibly shifting in a netocratic direction, ie. one where network wealth becomes more important than mere cash-wealth. So not being convertable isn't as big an issue for me as it seems for you.

Most commentators I've read believe that even in capitalism land and natural resources had already been supplanted by capital (stocks and shares in manufacturing and brands) as the primary form of wealth. Many people think the SemanticEstate? is in the process of supplanting ownership of manufacturing plant etc.

Or maybe you know all this and are promoting a contrarian counter-argument that land is more valuable than we give credit for, still more valuable than capital; and therefore, by analogy, physical diskspace will also be.

You may want to follow up this too : http://www.nooranch.com/synaesmedia/wiki/wiki.cgi?OwnTheNamespace

-- PhilJones


CategoryEconomy


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