Archive for the 'DataPortability' Category

Platform growth over user privacy

Facebook announced that data about yourself (like your phone number) would now be shared with applications. Since the announcement, they’ve backed down (and good work to ReadWriteWeb for raising awareness of this).

I’ve been quoted in RWW and other places as saying the following:

“Users should have the ability to decide upfront what data they permit, not after the handshake has been made where both Facebook and the app developer take advantage of the fact most users don’t know how to manage application privacy or revoke individual permissions,” Bizannes told the website. “Data Portability is about privacy-respecting interoperability and Facebook has failed in this regard.”

Let me explain what I mean by that:

This first screenshot is what users can do with applications. Facebook offers you the ability to manage your privacy, where you even have the ability to revoke individual data authorisations that are not considered necessary. Not as granular as I’d like it (my “basic information” is not something I share equally with “everyone”, such as apps who can show that data outside of Facebook where “everyone” actually is “everyone”), but it’s a nice start.

http:__www.facebook.com_settings_?tab=applications

This second screenshot, is what it looks like when you initiate the relationship with the application. Again, it’s great because of the disclosure and communicates a lot very simply.
Request for Permission

But what the problem is, is that the first screenshot should be what you see in place of the second screenshot. While Facebook is giving you the ability to manage your privacy, it is actually paying lipservice to it. Not many people are aware that they can manage their application privacy, as it’s buried in a part of the site people seldom use.

The reason why Facebook doesn’t offer this ability upfront is for a very simple reason: people wouldn’t accept apps. When given a yes or no option, users think “screw it” and hit yes. But what if they did this handshake, they were able to tick off what data they allowed or didn’t allow? Why are all these permissions required upfront, when I can later deactivate certain permissions?

Don’t worry, its not that hard to answer. User privacy doesn’t help with revenue revenue growth in as much as application growth which creates engagement. Being a company, I can’t blame Facebook for pursuing this approach. But I do blame them when they pay lipservice to the world and they rightfully should be called out for it.

Another scandal about data breaches shows the unrealised potential of the Internet as a network

The headlines today show a data breach of the Gawker media group.

Separately, I today received an email from a web service that I once signed up to but don’t use. The notice says my data has been compromised.

Deviant Art community breach

In this case, a partner of deviantART.COM had been shared information of users and it was compromised. Thankfully, I used one of my disposable email addresses so I will not be affected by the spammers. (I create unique email addresses for sites I don’t know or trust, so that I can shut them off if need be.)

But this once again raises the question: why did this happen? Or rather, how did we let this happen?

Delegated authentication and identity management
What was interesting about the Gawker incident was this comment that “if you logged in via Facebook Connect, in which case you’ll be safe.”

Why safe? For the simple reason that when you connect with Facebook Connect, your password details are not exchanged and used as a login. Instead, Facebook will authenticate you and notify the site of your identity. This is the basis of the OpenID innovation, and related to what I said nearly two years ago that it’s time to criminalise the password anti-pattern. You trust one company to store your identity, and you reuse your identity in other companies who provide value if they have access to your identity.

It’s scandals like this remind us for the need of data interoperability and building out the information value chain. I should be able to store certain data with certain companies; have certain companies access certains types of my data; and have the ability to control the usage of my data should I decide so. Gawker and deviantART don’t need my email: they need the ability to communicate with me. They are media companies wanting to market themselves, not technology companies that can innovate on how they protect my data. And they are especially not entitled for some things, like “sharing” data with a partner who I don’t know or can trust, and that subsequently puts me at risk.

Facebook connect is not perfect. But it’s a step in the right direction and we need to propel the thinking of OpenID and its cousin oAuth. That’s it, simple. (At least, until the next scandal.)

On Google and Facebook

Mike Melanson interviewed me today over the whole Facebook vs Google standoff. He wrote a nice piece that I recommend you read, but I thought I would expand on what I was quoted on to give my full perspective.

To me, there is a bigger picture battle here, and it’s for us to see true data interoperability on the Internet, of which this is but a minor battle in the bigger war.

I see a strong parallel to global trade and data portability on the web. Like in the days of restrictive trade tariffs that have been progressively demolished with globalisation, the ‘protectionism’ being cried out by each party of protecting their users is but a hollow attempt to satisfy their voters in the short-term, which are the shareholders of each company. This tit-for-tat approach is what governments still practice with trade and people-travel restrictions, but which at the end of the day hurts individuals in the short-term but society as a whole in the longer term. It doesn’t help anyone but give companies (and as we’ve seen historically, governments) a short term sigh of relief.

You only have to look at Australia, which went from having some of the highest trade tariffs in the world in the ’70s to being one of the most open economies in the world by the ’90s. The effect of this is that it made it one of the most competitive economies in the world, which is part of the reason that of all the OECD countries during the recent financial crisis, it managed to be the only economy not to fall into recession. Companies, like the economies governments try to protect, need to be able to react to their market to survive, and they can only do that successfully in the long term by being truly competitive.

The reality is, Facebook and Google are hurting the global information network, as true value unlocks when we have a peered privacy-respecting interoperability network. The belief that value is interpreted as who holds the most data, is a mere attempt to buy time for their true competitive threat — the broader battle for interoperability — which will expose them to compete not on the data they acquired but on their core value as a web service to use that data. These companies need to recognise what their true comparative advantage is and what they can do with that data.

Google and Facebook have improved a lot over the years with regards to data portability, but they continue to make the mistake (if not in words, but in actions) — that locking in the data is the value. Personal information acquired by companies loses value with time — people’s jobs, locations, and even email accounts — change over time and are no longer relevant. What a site really wants is persistent access to a person so they can tap into the more recently updated data, for whatever they need. What Google and Facebook are doing is really hurting them as they would benefit by working together. Having a uniform way of transferring data between their information network silo’s ensures privacy-respecting ways that minimise the risk for the consumer (which they claim to be protecting) and the liberalisation of the data economy means they can in the long term focus on their comparative advantage with the same data.

Announcing the Portability Policy

TechCrunch have been a big supporter of the DataPortability Project, which shows today with their encouragement for me to write a guest post on the Portability Policy, an initiative we announced today.

It’s exciting to see after all these years we are finally now reaching out to the world again, with something solid that people can rally behind. For years, we’ve been getting asked what people can do to show support for the philosophy of data portabiliy, but we’ve¬† been putting our heads down focussed on (necessary) things that made us fall off the map – like developing a sophisticated new governance model that is an innovation in itself (as virtual companies are still a new concept); the legal structure to become a non-profit; as well as the Portability Policy work itself which required hundreds of hours of research, discussion, and reflection.

If you’re interested in adopting a Portability Policy (read the above linked posts for more), you can do so very easily with a generator we are releasing today. Phil Wolff from the workgroup that developed this effort, also has a briefing pack and can help you understand what it is. Post a message on the community mailing list and we’ll respond to any issues you have.

A billion dollar opportunity with video

When Google made an offer for On2, I was dumbfounded. I wrote to a friend working at Google the following:

Phat. But I’m confused. How does Google benefit by making the codec free? I understand Google’s open culture, but for 100million, really? They help the world, but what’s the incentive for Google? (Other than of course, controlling it).

The reply: “incentive = greater adoption of HTML 5 = apps are written for HTML 5 = apps can be monetized using Adsense”.

Interesting perspective from a smart Googler who had no real insider information. But no cigar.

Newsteevee posted a follow up article today on what Google is going to do with this technology, quoting the Free Software Foundation. What really made me get thinking was this (emphasis mine:

Google’s Open Source Programs Manager Chris DiBona had previously argued that Ogg Theora would need codec quality and encoding efficiency improvements before a site as big as YouTube could use it as its default video codec. The FSF now writes in its letter that it never agreed with these positions, but that Google must have faith in VP8 being a better codec if it invested its money in it (Google spent a total of about $133 million on ON2).

The open source advocacy group apparently realized that Google wouldn’t switch codecs from one day to another, which is why it suggests a number of smaller steps to make VP8 mainstream. “You could interest users with HD videos in free formats, for example, or aggressively invite users to upgrade their browsers (instead of upgrading Flash),” the letter reads, adding that this would eventually lead to users not bothering to install Flash on their computers.

Think about that for a second: video on the web finally becomes free for real and open, becoming a core infrastructure to the online world – but the default is crappy. Don’t like crappy? Well Mr and Ms consumer, if you want High Definition, you need to pay for a subscription to a premium codec by the already dominate Adobe or another rising star. Assuming you get the whole word watching video and only 1% convert – holy crap, isn’t that a brilliant business model?

Bono, the lead singer of the band U2 wrote in an op-ed piece in the New York Times the following recently:

The only thing protecting the movie and TV industries from the fate that has befallen music and indeed the newspaper business is the size of the files”

Simple but profound insight from the famed entertainer. So with this fairly obvious logic, why isn’t the movie industry (backed by Google and Apple) innovating business models in this area? Value comes from scarcity – and quality is the best way of doing it. The reason why box office sales and Blu-ray broke a record in 2009, is because the quality is worth the premium for consumers.

What’s the incentive for Google, to answer my own question? The return on investment to be associated with a default open technology that you give the option to upgrade to users, is a billion dollar business waiting to happen. Doing no evil to the world and securing future growth at the same time sounds like a Google business in the making,

The Information Value Chain and its Network

The Information Value Network is an economic theory for Internet businesses, which incorporates my original thinking of the Information value chain. It describes how data openness, interoperability and data portability allows for greater value creation for both service providers and their users. It is proposed by myself, and is inspired by two existing theories: David Ricardo’s 1817 thesis of comparative advantage and Michael Porter’s 1985 concept of the Value Chain.

The theory on information value-chains and networks
Information Value Chain
Figure 1: Information Value Chain

The information value chain recognises the value activities required in the use of information. It represents the cycle of a common information product, with the activities most likely undertaken by one entity.

The activities can be broken down into two components within the value chain.
1) Primary value activities relate to aspects of the chain that are the core information product. They are data creation, information generation, and knowledge application.
2) Supporting value activities relate to aspects of the chain that assist the core information product. They are storage, processing, and distribution.

As an example of the above, a photo can be a core information product — with a single image being “data”. The adding of EXIF data, titles, and tags creates information as it enables additional value unlocked in the context of the core information product (the photo).

Knowledge is created when the photos are clustered with other similar photos, like a collection of photos from the same event. Each of the information products may present their own information value, but in the context of each other, they reveal a story of the time period when the pictures where taken — unlocking additional value.

The secondary activities of storage, processing, and distribution of the information product are integral to it. However, they are merely a process that assist in the development of the product and as such are not to be considered the core activities.

Another point to note is that these secondary processes can occur at any three stages of the information process. Computing processing is required when a photo is taken (data creation), when it is edited with additional information like a title (information), and when it is grouped with other photos with similar characteristics (knowledge). Similarly, cloud computing storage or local storage is required for any of those three stages of the information product, with distribution necessary at any stage as well.

Information Value Network
Figure 2: Information Value Network

Whereas the information value chain describes the activities of an information product, it does not acknowledge the full environment of an information product. Information is an intangible good that is utilised by humans (and with increased sophistication over time, by machines) to assist in their own internal thinking. It does not live in isolation, and its presence alongside other information products and their value development cycles can have a huge impact.

In the diagram above, the information value chain has been extended when looking at the context of multiple entities.

In the network, several entities may agree to exchange information products created through their own respective activities, in order to add additional value to each other. Information and knowledge both derive their value from having as many sources as possible; whether it be data sources, but also processed data in the form of information.

Extending the photo example use earlier, another entity may have created an information product relating to geolocation. It has acquired the geo-coordinates of regions, presented them in the appropriate geo standards, and placed them on a map. The owner of a set of activities that generated the photo, can match their geodata to this other activity process and have the photos mapped by location — as well as analysis or specific types of visualisation that can be can be done due to proximity with other photos.

Background to the concepts supporting the theory
Comparative advantage
The law of comparative advantage in international trade states that, if a country is more productive producing one good over another country, it should focus on allocating its resources to that production. Further, if a country has an absolute advantage producing multiple goods, it should focus only on the one where it yields the most productive capacity.

By specializing in producing the products with the higher comparative advantage — even if they across the board are the most efficient at doing them all — the world can expand total world output with the same quantity of resources due to specialisation.

Value chain
A Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. It is one way of identifying what activities are best undertaken by a business and which are best provided by others (ie, out-sourced).

It helps a company look are what its core competitive advantage is, and segments the activities surrounding its competitive advantage, in order to realize efficiencies and better value creation.

Data, Information, and knowledge
Data can be defined as an object that represents something. Typically data lacks meaning, although it derives meaning when context is added.

Information on the other hand, is what is considered when connecting different data objects — the actual linkages between data objects are what is information. Meaning can be derived through the context of data.

Likewise, knowledge is the extension in this chain of development. That being, the application of information in the context of other information.

Comment on the economic incentive for firms
Industries that operate with the purpose of generating, managing or manipulating information products will benefit by working with other like organisations. It reduces cost, increases engagement, and more fundamentally will increase total value creation.

Cost
By focusing on what an entity has a comparative advantage in and identifying its true competitive advantage, it can focus its resources on the activity that ultimately maximise the entity’s own value.

Take as a case in point a photo sharing website, that is aiming to be both a storage facility (ie, ‚”unlimited storage”) as well as a community site.

  • Feature development: Development resources will face competition to build functionality for the photo service, to cater for two completely purposes. This will lead to opportunity cost in the short-term, and potentially the long term if dealing in a highly competitive market.
  • Money: Any resource acquisition, whether it be external spending or internal allocations, face conflict as the company is attempting to win on two different types of businesses
  • Conflict of interest: The decision makers at the company do not have aligned self interest and face conflict. For example, if a user puts their photos at a pure storage service, management will do what they can to maximise that core value. If the company also does community, management may trade storage value (such as privacy) for the benefits of building the other aspect of the business.

Engagement
In the context of web services, engagement of a user is a key priority. Economic value can be derived by a service due to attention, conversion, or simply a satisfied customer through the experienced offered.

If a service provider focused on their core competency, value can be maximised both for a users engagement and a provider’s margin.

A commerce site aims to convert users and make them customers through the purchase of goods. Commerce sites rely on identity services to validate the authenticity of a user, but it’s not part of their core value offering. In the case of one business, the web designers took away the Register button. In its place, they put a Continue button with a simple message: “You do not need to create an account to make purchases on our site. Simply click Continue to proceed to checkout. To make your future purchases even faster, you can create an account during checkout.”

The results: The number of customers purchasing went up by 45%. The extra purchases resulted in an extra $15 million the first month. For the first year, the site saw an additional $300,000,000.

The significance of this is that by attempting to manage multiple aspects of the experience of their users, this business actually lost potential business. If they integrated their commerce site with an identity site experienced in user login, they may have leveraged this expertise a lot earlier and minimised the opportunity cost.

Value creation
Continuing the example of a photo, let’s assume multiple services work together using the same photo, and that there is full peer-to-peer data portability between the services.

The popular social-networking site Facebook described a technique where they were able to speed up the time they served photos to their users. In a blog post, they state that by removing the EXIF data — metadata that describes the photos (like location, shutter speed, and others — they were able to decrease the load on the servers to produce the photo.

This is fine in the context of Facebook, where the user experience is key and speed matters. But if a person uploaded their photos there as their only copy, and they wanted to use the same photos in a Flickr competition — whose community of passionate photographers puts a different criteria on the photos — they would be at a loss.

In a world that has true data portability, the photos (say the RAW images) could be stored on a specialised storage solution like Amazon S3. The online version of Photoshop could edit the RAW images to give an enhanced quality image for the Flickr community; whereas Google App engine could be used for a mass editing that is computer-intensive, in order to process the multiple RAW photos into EXIF-stripped images for distribution within Facebook. The desktop application Cooliris could access the newly edited photos that still retain their EXIF data, and have them visualised in its proprietary software, which gives a unique experience of viewing the information product.

The significance of the above example is that each service is using the same core information product, but for a completely different purpose. On the surface, all services would appear to be competing for the information product and “lock in” the user to only use it on their service. But the reality is, better value can be generated with their peered data portability. And in some cases, greater efficiencies realised — allowing the web services to focus on what their true comparative advantage is.

Comment on value-creation versus value-capture
This paper makes a explicit explanation on how value is generated. It does not, however, explain how that value can be captured by firms.

It is beyond the scope of this particular discussion to detail how value capture can occur, although it is an important issue that needs to be considered. Web businesses repeatedly have proven to fail to monetise on the web effectively.

This however is more a industry issue than a specific issue related to openness, and this paper makes the case of firms to focus on their core competitive advantage rather than how to monetise it. Instead it suggests that more firms can monetise, which creates total economic output to increase. How the output is shared amongst market participants is a matter of execution and specific market dynamics.

2010 wish granted, Liz.

Liz Gannes wrote a post on GigaOM asking for a service that could give her a dashboard for the social web, in 2010.

She writes:

I think it’s about time for a personal dashboard to track and view what happens to what we share online. This would have two primary uses: 1) Privacy: I’d have a better idea of what’s publicly known about myself, and
2) Analytics: Like any content publisher, I’d be interested in checking my stats and trends.

Well Liz, consider your wish granted. Marc Canter suggested the DiSo dashboard almost a year ago in January 2009 and going even further back, Chris Saad two years ago used the Web File System as a visualisation of his vision for what we are advocating at the DataPortability Project.

But in 2009, we’ve seen something even better emerge, which is being shepherded by the Kantara Initiative: the User Managed Access or UMA project.

It’s a protocol being spearheaded by Eve Maler, who is also one of the co-inventors of XML, one of the web’s core technologies and a co-founder of SAML which is one of the major identity technologies around (think OpenID but for enterprise).

It allows you to have a dashboard, where you can manage sites subscribed to your data via URL’s. You can set access rules to those URL’s, like when they expire and what data they can use. It’s like handing web-services a pipe that you can block and throttle the flow of data as you wish, all managed from a central place. Not only does this mean better privacy, but it also satisfies your request for analytics as you can see who is pulling your data.

So now my wish: let’s spread awareness of great efforts like this. 🙂

Vote for my SXSW presentation!

I’ve submitted to do a presentation at SXSW, which is the Internet and technology industry’s biggest conference. I attended my first SXSW this year and was blown away by the people, the passion and the ideas. However something that bugged me, was that a lot of people submitted panels with agendas: they either snuck buzzwords into their panel description, to be thinly veiled attempt in getting an audience for themselves (despite no substance in the content). More common were panels that were based around something with a clear motivation to promote their company or business. It was tiring and I know a lot of people were annoyed by that.

Only about 300 people will get accepted for SXSW 2010, with a large part of the decision being decided by people voting on 2200 submissions. I hope I get to do my presentation, because I want to propose a new economic model that will help people understand opportunities for businesses in the Information economy. (It will also be the first public attempt to really explain data portability business models.) I’m also going to synthesise 50 years of technology development, and explain where things are evolving.

My goal is not to self-promote any agenda of mine, but quite simply, to get people excited about the future as much as I am. Because after all, it takes driven passionate people to build new businesses and to create growth is this troubled economy.

So click here, login and vote for me. I *promise* I’ll make it awesome.

An invention that could transform online privacy and media

The University of Washington announced today of an invention that allows digital information to expire and “self-destruct”. After a set time period, electronic communications such as e-mail, Facebook posts, word documents, and chat messages would automatically be deleted and becoming irretrievable. Not even the sender will be able the retrieve them, and any copy of the message (like backup tapes) will also have the information unavilable.

GmailEncapsulated

Vanish is designed to give people control over the lifetime of personal data stored on the web or in the cloud. All copies of Vanish encrypted data — even archived or cached copies — will become permanently unreadable at a specific time, without any action on the part of a person, third party or centralised service.

As the New York Times notes, the technology of being able to destruct digital data is nothing new. However this particular implementation uses a novel way that combines a time limit and more uniquely, peer-to-peer file sharing that degrades a “key” over time. Its been made available as open source on the Mozilla Firefox browser. Details of the technical implementation can be found on the team’s press release, which includes a demo video.

FacebookEncapsulated

Implications
Advances like this could have a huge impact on the world, from controlling unauthorised assess to information to reinforcing content-creators copyright. Scenario’s where this technology could benefit

  • Content. As I’ve argued in the past, news derives its value from how quickly it can be accessed. However, legacy news items can also have value as an archive. By controlling the distribution of unique content like news, publishers have a way of controlling usage of their product – so that they can subsequently monetise the news if used for a different purpose (ie, companies researching the past for information as opposed to being informed by the latest news for day to day decision making)
  • Identity. Over at the DataPortability Project, we are in the finishing touches of creating our conceptial overview for a standard set of EULA and ToS that companies can adopt. This means, having companies respect your rights to your personal information in a standardised way – think how the Creative Commons has done for your content creations. An important conceptual decision we made, is that a person should have the right to delete their personal information and content – as true portability of your data is more than just reusing it in a different content. Technologies like this allow consumers to control their personal information, despite the fact they may not have possession, as their data resides in the cloud.
  • Security. Communications between people is so that we can inform each other in the ‘now’. This new world with the Internet capturing all of our conversations (such as chat logs and emails threads) is having us lose control of our privacy. The ability to have chat transcripts and email discussions automatically expire is a big step forward. Better still, if a company’s internal documents are leaked (as was the case with Twitter recently), it can rely on more avenues to limit damage beyond using the court system that would issue injunctions.

GoogleDocsEncapsulated

There’s a lot more work to be performed on technologies like this. Implementation issues aside, the inline encryption of the information doesn’t make this look sexy. But with a few user interface tweaks, it gives us a strong insight into real solutions for present day problems with the digital age. Even if we simply get companies like Facebook, Google, Microsoft ad Yahoo to agree on a common standard, it will transform the online world dramatically.

The business model of API’s

Application Programming Interfaces – better known in the technology industry as API’s – have come out as one of the most significant innovations in information technology. What at first appears a geeky technical technique for developers to play with, is now evolving into something that will underpin our very society (assuming you accept information has, is, and will be the the crux of our society). This post explores the API and what it means for business.

API are cool

What is it?
In very simple terms, an API is a set of instructions a service declares, that outsiders can use to interact with it. Google Maps has one of the most popular API’s on the Internet and provides a good example of their power. Google hosts terabytes of data relating to its mapping technology, and it allows developers not affiliated with Google to build applications on top of Google’s. For example, thousands of websites like the NYTimes.com have integrated Google’s technology to enhance their own.

An example more familiar with ordinary consumers would be Facebook applications. Facebook allows developers through an API to create ‘apps’ that have become one of the main sources of entertainment on Facebook, the world’s most popular social networking site. Facebook’s API determines how developers can build apps that interact with Facebook and what commands they need to specify in order to pull out people’s data stored in Facebook. It’s a bit like a McDonald’s franchise – you are allowed to use McDonald’s branding, equipment and supplies, so long as you follow the rules in being a franchisee.

API’s have become the centre of the mashup culture permeating the web. Different websites can interact with each other – using each others technology and data – to create innovative products.

API photo visualisation

What incentive do companies have in releasing an API?
That’s the interesting question that I want to explore here. It’s still early days in the world of API’s, and a lot of companies seem to offer them for free – which seems counter-intuitive. But on closer inspection, it might not. Free or not, web businesses can create opportunity.

Free doesn’t mean losing
An API that’s free has the ability to generate real economic value for a new web service. For example, Search Engine Optimisation (SEO) has become a very real factor in business success now. Becoming the top result for the major search engines generates free marketing for new and established businesses.

In order for companies to boost their SEO rankings, one of the things they need to do is have a lot of other websites pointing links at them. And therein flags the value of an open API. By allowing other people to interact with your service and requiring some sort of attribution, it enables a business to boost their SEO dramatically.

Scarcity is how you generate value
One of the fundamental laws of economics, is that to create value, you need something to be scarce. (That’s why cash is tightly controlled by governments.) Twitter, the world’s most popular micro-blogging service, is famous for the applications that have been built on their API (with over 11,000 apps registered). And earlier this year, they really got some people’s knickers in a knot when they decided to limit usage of the API.

Which is my eyes was sheer brilliance by the team at Twitter.

Crumped up cash note

By making their API free, they’ve had hundreds of businesses build on top of it. Once popular, they could never just shut the API off and start charging access for it – but by introducing some scarcity, they’ve done two very important things: they are managing expectations for the future ability to charge additional access to the API and secondly, they are creating the ability to generate a market.

The first point is better known in the industry as the Freemium model. Its become one of the most popular and innovative revenue models in the last decade on the Internet. One where it’s free for people to use a service, but they need to pay for the premium features. Companies get you hooked on the free stuff, and then make you want the upgrade.

The second point I raised about Twitter creating a market, is because they created an opportunity similar to the mass media approach. If an application dependent on the API needs better access to the data, they will need to pay for that access. Or why not pay someone else for the results they want?

Imagine several Twitter applications that every day calculate a metric – that eats their daily quota like no tomorrow – but given it’s a repetitive standard task, doesn’t require everyone having to do it. If the one application of say a dozen could generate the results, they could then sell it to the other 11 companies that want the same output. Or perhaps, Twitter could monitor applications generating the same requests and sell the results in bulk.

That’s the mass media model: write once, distribute to many. And sure, developers can use up their credits within the limit…or they can instead pay $x per day to get the equivalent information pre-mapped out. By limiting the API, you create an economy based on requests (where value comes through scarcity) – either pay a premium API which gives high-end shops more flexibility or pay for shortcuts to pre-generated information.

API diagram

API’s are part of the information value chain
An economic concept I proposed a year ago (and am going to revise over the coming year with some fresh thought) is called the Information Value Chain. It takes an established economic theory that has dictated business in the industrial age, and applies it in the context of businesses that create products in information or computing utility.

With reference to my model, the API offers the ability for a company to specialise at one stage of the value chain. The processing of data can be a very intensive task, and require computational resources or raw human effort (like a librarian’s taxonomy skills). Once this data is processed, a company can sell that output to other companies, who will generate information and knowledge that they in turn can sell.

I think this is one of the most promising opportunities for the newspaper industry. The New York Times last year announced a set of API’s (their first one being campaign finance data), that allows people to access data about a variety of issues. Developers can then query this API, and generate unique information. It’s an interesting move, because it’s the computer scientists that might have found a future career path for journalists.

Journalists skills in accessing sources, determining significance of information, and conveying it effectively is being threatened with the democratisation of information that’s occurred due to the Internet. But what the NY Times API reflects, is a new way of creating value – and it’s taking more of a librarian approach. Rather than journalism become story-centric, their future may be one where it is data based, which is a lot more exciting than it sounds. Journalists yesterday were the custodians of information, and they can evolve that role to one of data instead. (Different data objects connected together, by definition, is what creates information.)

A private version of the semantic web and a solution for data portability
The semantic web is a vision by the inventor of the World Wide Web, which if fully implemented, will make the advances of the Internet today look like prehistory. (I’ve written about the semantic web before to give those new to the subject or skeptical.) But for those that do know of it, you probably are aware of one problem and less aware of another.

The obvious problem is that it’s taking a hell of a long time to see the semantic web happen. The not so obvious problem, is that it’s pushing for all data and information to be public. The advocacy of open data has merit, but by constantly pushing this line, it gives no incentive for companies to participate. Certainly, in the world of data portability, the issue of public availability of your identity information is scary stuff for consumers.

Enter the API.

API’s offer the ability for companies to release data they have generated in a controlled way. It can create interoperability between different services in the same way the semantic web vision ultimately wants things to be, but because it’s controlled, can overcome this barrier that all data needs to be open and freely accessible.

Concluding thoughts
This post only touches on the subject. But it hopefully makes you realise the opportunities created by this technology advance. It can help create value without needing to outlay cash; new monetisation opportunities for business; additional value in society due to specialisation; and the ability to bootstrap the more significant trends in the Web’s evolution.