I’ve been quiet on Searchblog for most of the holidays, but I don’t expect that to continue in 2012. This will be the year of focusing on just two things: Federated Media, and The Book. Both will drive a lot of thinking, writing, and dialog on this site.

I’ve been on vacation these past few days and it’s given me a fair amount of time to reflect on the past year, as well as on what’s to come for 2012. Expect my annual predictions post in the next few days. Meanwhile, have a great New Year’s Eve, and here’s to a great year ahead.

(image) For many years now I’ve made predictions, and for just as many years I review how I did. This is the week I do the reviewing, my predictions for 2012 should arrive around the New Year, assuming I find the right inspiration.

2011 was a strange year in many ways. We lost Steve Jobs, stupid Internet legislation reared its ugly head yet again in the form of SOPA, Internet IPOs came back in a big way (but didn’t perform as well as most would have liked), and the world woke up to the implications of programmatic buying and Big Data, in a Very Big Way.

As I look back on my predictions of twelve months ago, I think I did a pretty good job, but left plenty of room for improvement. Here’s a rundown of how I did, with some supporting citations, where appropriate:

Prediction #1: We’ll see the rise of a meme which I’ll call “The Web Reborn.” 

If you read this site closely, you’ll have noticed that I’m a bit up in arms about the impact this whole “AppWorld” phenomenon is having on the “real web.” AppWorld is not the Web, in fact, it’s utterly un-weblike. I’ve written about this all year long, too mostly little effect in the larger world. But just recently a meme has risen, in fact, that sounds an awful lot like what I predicted. To wit:

Dave Winer: Why apps are not the future and Enough with the apps already

Doc Searls: Broadband vs. Internet

Jonathan Zittrain: The PC is dead. Why no angry nerds?

Scott Hanselman: Apps are too much like 1990′s CD-ROMs and not enough like the Web

And of course, my latest: On This Whole “Web Is Dead” Meme

Score: I think I called this right. There is a robust movement toward saving the core principles that made the web what it is. But it’s at the early stages at this point. Score: 7 of 10. 

Prediction #2: Voice will become a critical interface for computing (especially mobile apps). 

Hello, Siri…I’d say this one happened, with bells on. And it’s just the beginning. Score this a 9 out of 10 (because Siri, while very important, is still not as good as it can be. Then again, Google, Amazon, and Microsoft all made voice moves this year as well).

Prediction 3: DSPs (Demand Side Platforms) will fade into the fabric of larger marketing platforms. 

This one is hard to quantify, it’s more of a feeling – DSPs were the Big Scary Development in the ad industry a year ago, and now…not so much. They are just part of the world we live in, and programmatic buying is a fact of life, one that is growing very, very quickly. Publishers have responded with their own adtech (FM purchased Lijit, for example, Google bought AdMeld), and on we go. I think I got this right, in the main.

Score: 8 of 10.

Prediction 4: MediaBank will emerge as a major independent player in the marketing world, playing off its cross channel reach (outside of digital) and providing an alternative to the conflicted digital platforms at Facebook, Microsoft, Google, and Yahoo.

Well, MediaBank merged with its main competitor, DDS, to form MediaOcean, run by the CEO of MediaBank. And the combined company is a behemoth, one capable of standing toe to toe with Google on several fronts. I think this one absolutely happened.

Score: 10 of 10.

Prediction 5: The Mac App Store will be a big hit, at least among Mac users, and may well propel Mac sales beyond expectations.

I’m not quite sure how to score this one. I don’t get the sense the Mac App Store was a big buzzy hit, but Apple recently released numbers about its success - 100 million downloads in the first six months of its existence (the last six months of this year).

And the company’s Mac sales are for sure on a roll, though I don’t know if one can attribute this to the Mac App Store. In short, it might be too early to call this one definitively, but net net, the trending is good.

Score: 7 out of 10.

Prediction 6: Apple will attempt to get better at social networking, fail, and cut a deal with Facebook.

Oh boy, I got this so tantalizingly right, or wrong…depending on how you score it. Let’s break it down. “Apple will attempt to get better at social networking…” Check – Apple introduced Ping late in 2010 and then updated it throughout the year.  ”…fail…” Check. Ping never really took off. “…and cut a deal with Facebook.” DOOOOH. No way. If only I had said “…and cut a deal with Twitter….” I should have seen that Apple would never play nice with Facebook, if only due to the conflict around owning the business of media consumption. It sure did try, but negotiations broke down, according to most reports.

Score: 6 of 10.

Prediction 7: Apple will begin to show signs of the same problems that plagued Microsoft in the mid 90s, and Google in the past few years: Getting too big, too full of themselves, and too focused on their own prior success.

Now showing this prediction came true won’t be easy, but let’s take a few stories throughout the year as proof points. First, most of the “Web reborn” backlash (#1 above) is a response to Apple’s restrictive iOS. Then there’s the FT’s unqualified success in routing around Apple (see PC’s coverage), which nearly every major media and entertainment company is watching very closely. And there are plenty of rumblings (though not nearly as many as with Facebook, see #13):

IDC offers scathing prediction of certain death for Apple’s iAd program

Apple Made A Deal With The Devil (No, Worse: A Patent Troll)

Apple arrogance exposed by iPad undesign

All in all, I probably didn’t nail this one. But I’m not going to say it isn’t starting to happen. Score: 5 of 10.

Prediction 8: Microsoft will have a major change in leadership. I am not predicting Ballmer will leave, but I think he and the company will most likely bring in very senior new talent to open new markets or shift direction in important current markets.

Well, thanks to the Andy Lees move last week, I look like a genius. Also, long time Microsoft exec Yusuf Medhi, responsible for the most important piece of Microsoft’s new business (Bing), has been moved to its next possibly most important line of business, Xbox. Not to mention Ballmer’s various shakeups of senior management this year. Plus, rumblings continue about whether Ballmer is the right man for the job – to the point of some wags speculating that Gates might come back. As if. Score: 9 of 10. 

Prediction 9: The public markets will be surprisingly open to major new Internet deals.

Well, I could argue this is utterly true. After all, compared to 2010, there was a raft of Internet deals that got out this year – Demand, LinkedIn, Zillow, Angie’s List, Pandora, Zynga – with many more filings pending public debut. But none of them did very well – most if not all are trading below offering price. So the market let them get out, but isn’t trading them up. So was the market “open”? Yes. Was it enthusiastic after open? No.

Score: 7 of 10.

Prediction 10: The tablet market will have a year of incoherence. Apple will dominate with the iPad due to a lack of an alternative touchstone.

Well, that was way too easy. Exactly what happened – HP tried, failed. RIM tried, failed. Amazon is trying, and the early reviews ain’t great. We’ll see. Score: 10 of 10. 

Prediction 11: “Social deals” will morph to become a standard marketing outlet for all business, and by year’s end be seen as a standard part of any marketer’s media mix.

I think this has happened – nearly every small business has now heard of daily deals, and most forward leaning companies both large and small are using deals as a channel like any other (search, Yellow Pages, etc.). Don’t forget that a year ago, when I wrote this prediction, folks were talking about the deal market as something totally unique, like DSPs.

Related, in this prediction I also wrote “I’m tempted to say Facebook will abandon its own Deals offering for a deal with Groupon, but I’m not sure that will unfold in one year.” Facebook did indeed bail on its Deals offering, but did not cut a deal with Groupon. (Foursquare did).

Score: 9 of 10. 

Prediction 12: Groupon will fend off an acquisition by a major carrier, probably AT&T or Verizon. It’s possible they’ll sell, but I doubt it.

Google tried to buy Groupon around the time I made this prediction, but failed. I am unaware of any other suitors for the company on its way to its IPO, but I’m not privy to what might have happened. Nothing was publicly reported, however, so I’ll have to say I whiffed this one.

Score: 0 of 10.

Prediction 13: Facebook will decline as a force in the Internet world, as measured by buzz. The company will continue to be seen as Big Brother in the press, and struggle with internal issues related to growth. Also, it will lose some attention/share to upstarts. However, its share of marketing dollars and reach will increase.

OK, I think I got this one right, but one can argue, as always. Here are a litany of headlines over the year:

Amid backlash, Facebook tries to save face (Cnet)

Facebook as the New AOL (RWW)

Facebook Is AOLifying the Internet—and That Sucks (Gizmodo)

Facebook is gaslighting the web. We can fix it. (Anil Dash)

How Facebook is Killing Your Authenticity (Steve Cheney)

It’s time for a Facebook intervention (TNW)

President Obama Doesn’t Let His Daughters Use Facebook (HP)

The Decline and Fall of Facebook (Cringely)

I could find more, but I think you get a picture here of a broad swath of “buzz makers” questioning the company. Meanwhile, according to all reports, the company is killing it in revenue.

Score: 8 of 10. 

Prediction 14: We’ll see major privacy related legislation in the US brought to the floor of Congress, and then fail for lack of consensus. But that will drive a significant shift in how our culture understands its relationship to the world our industry is building, and that’s a good thing.

Well, we had quite a number of these bills brought to Congress in one way or another. I probably should not have used the words “to the floor,” as that implies open debate. Nearly everyone in Congress and the Executive branch talks about some kind of privacy legislation, but no one can seem to agree what that means.

As of late Fall, seven different legislators have introduced bills. But as far as I can tell, none have really gotten anywhere. However, the conversation around the issues has accelerated significantly, as predicted.

Score: 9 of 10. 

In summary, I think my predictions fared pretty well. If you take a score of 7 or more as a “hit,” 4-6 as a “foul ball,” and below 4 as a “strikeout,” I hit 10 of 14, fouled off 3 of 14, and whiffed massively just once.

So, how do you think I did?!

Related:

Predictions 2011

Predictions 2010

2010: How I Did

2009 Predictions

2009 How I Did

2008 Predictions

2008 How I Did

2007 Predictions

2007 How I Did

2006 Predictions

2006 How I Did

2005 Predictions

2005 How I Did

2004 Predictions

2004 How I Did

Ten years ago, Google’s first Zeitgeist inspired my first book (The Search). Here are some highlights from the tenth annual edition. Props to Google for going deeper than most year end lists with its data. Now…open source the damn data, folks!!!

A couple of weeks ago I met with the CEO of TextPlus, and wrote up my experience here. I mentioned he has some news coming, and this is it: TextPlus, which is a popular free text messaging service, is launching free calling between TextPlus members today. Calling to regular lines is pretty cheap to boot (like 99 cents for 40 minutes).

Why am I writing this up? Because it makes me wonder….TextPlus is a fast growing service that is leveraged over the Apple iOS world I call AppWorld. It serves at the whim of a gatekeeper, in this case, Apple (you can also get it for Android, which is growing faster). Apple, in turn, must keep its carriers happy by selling tons of iPhones (and iPads) with plans that lock customers into paying a pretty penny for data and voice connectivity. And I am not sure those carriers are happy with the idea of a fast growing app that helps teenagers (TextPlus’ main constituency) bypass those profitable service plans. It’s like a built in way to teach the next generation of customers how to cut the cord.

Sure, there’s always Skype and Google Hangouts and such, so perhaps this isn’t such a big deal. But then again, maybe it is. With Wifi coverage growing quickly these days, TextPlus – perhaps the name now should be CommPlus – is one to watch, IMHO.

The Web is dead again, at least, according to a widely covered speech by Forrester Research’s George Colony.

Speaking at Le Web last week, Colony claimed that the HTML web is a poorly architected half step in the next, obvious progression of platforms: a hybrid between what we’ve come to know as the Web and the crippled chicletized place I’ve been calling AppWorld. In a stroke of nomenclature insight, Colony calls this new platform the App-Internet.

Colony argues that, unlike apps, the Web doesn’t leverage the processing and storage power of edge devices (like the iPad or a smartphone, for example. Or, say, an old school computer, like the one I’m using right now to write this post.)

In theory, I agree with Colony, but I’m not sure the real issues are elucidated in his speech, or in much of the coverage of it. If the next version of the “Web” loses that which makes the web special, it won’t be the web anymore. That’s when, for me anyway, the “web will be dead.” If the web keeps its core principles, well, then, we’ll keep calling it the web, I’d wager, even if it ends up looking like the “app-internet.”

Let me explain, if I can. I feel like I’ve written this many times before, but perhaps not so directly as now. What makes the web special is not the language(s) in which it is written  (HTML, javascript, and so on). To me, what makes the web special are the underlying assumptions about how it works. In no particular order, they include:

- No gatekeepers. The web is decentralized. Anyone can start a web site. No one has the authority (in a democracy, anyway) to stop you from putting up a shingle. Of course, we live in a society of law, so if that new site breaks a law, well, you might have to take that shingle down. That’s OK with me.

- An ethos of the commons. The web developed over time under an ethos of community development, and most of its core software and protocols are royalty free or open source (or both). There wasn’t early lockdown on what was and wasn’t allowed. This created chaos, shady operators, and plenty of dirt and dark alleys. But it also allowed extraordinary value to blossom in that roiling ecosystem. Over time, the good actors have come to agree on best practices which have allowed an extraordinary new resource to thrive. These practices include privacy policies, data use policies, and even some reasonable law (we’re still working out a lot of the law part, but it’s happening slowly and with consideration, as I believe it should). In short, we’re taking the time to codify the rules of the road on the web. We’ve not pushed it into early lockdown in terms of policy. The same is absolutely not true of AppWorld.

- No preset rules about how data is used. If one site collects information from or about a user of its site, that site has the right to do other things with that data, assuming, again, that it’s doing things that benefit all parties concerned. If it does stupid things, that site will be called out, and folks won’t visit it anymore. Yes, some people may get burned, but on balance, we’ve decided that it’s better to allow sites and their customers to determine the best use of data, rather than pre-determine data policy to the point where innovation is stifled. This is something of a corollary to my point above, but it bears explanation. Here’s one small example: When I watch a movie on Netflix using its website, Netflix stores information about how I watch that movie. If I stop watching and leave the site, Netflix remembers where I stopped, and gives me the option to resume the next time I go to the site. And if I fire up my iPad and launch the Netflix app, it also remembers where I was – because you can import data from the web into Apple’s AppWorld. But if I start watching a movie in AppWorld, then go to the open web to continue watching it, I can’t resume the movie. Netflix doesn’t remember what I’ve done on its iOS app. Why? Because in AppWorld, data can come in, but it can’t go out. This stifles innovation in so many ways I’m going to have to write another post to explain it.

- Neutrality. No one site on the web is any more or less accessible than any other site. If it’s on the web, you can find it and visit it. This is a corollary of “no gatekeepers,” but again, it bears elucidation. In current versions of AppWorld, finding anything is a challenge, and the winners are almost always those who get special treatment in a gatekeeper’s storefront.

- Interoperability. Sites on the web share common protocols and principles, and determine independently how to work with each other. There is no centralized authority which decides who can work with who, in what way. In AppWorld, the apps don’t talk to each other, and from what I can tell, you need permission from the gatekeeper if you’re going to work around that fact. Again, this stifles true innovation. Imagine if Google needed permission from some overlord to crawl the web back in 1998. It would never have gotten off the ground, and the second great Web boom may never have happened.

I’m sure I’ve missed a few key points, but I think you get the picture. If Colony’s “app-internet” sheds the crappy parts of AppWorld, and keeps the best parts of our current Web, I’m all for it. But if the reverse happens, I’m all in – against it. Long live the web!

(image) An interesting interview in the NYT  I missed from last week, with noted author Neal Stephenson. In it, he riffs on something that’s been bugging me as I work on the book. Asked about “the future of computing,” he responds:

“I’ll tell you what I’d like to see happen,” he said, and began discussing what the future was supposed to have looked like, back in his 1960s childhood. He ticked off the tropes of what he called “techno-optimistic science fiction,” including flying cars and jetpacks. And then computers went from being things that filled a room to things that could fit on a desk, and the economy and industries changed. “The kinds of super-bright, hardworking geeky people who, 50 years ago, would have been building moon rockets or hydrogen bombs or what have you have ended up working in the computer industry, doing jobs that in many cases seem kind of ignominious by comparison.”

Again, a beat. A consideration, perhaps, that he is talking about the core readership for his best sellers. No matter. He’s rolling. He presses on.

“What I’m kind of hoping is that this is just kind of a pause, while we assimilate this gigantic new thing, ubiquitous computing and the Internet. And that at some point we’ll turn around and say, ‘Well, that was interesting — we have a whole set of new tools and capabilities that we didn’t have before the whole computer/Internet thing came along.’ ”

He said people should say, “Now let’s get back to work doing interesting and useful things.”

I know that many of us in the Internet industry believe we are working on things that are changing the world. But it’s worth asking ourselves if honestly that’s true. We’ve got some really big problems to attack, and we need the best minds of our generation on them.

Stephenson’s thoughts are elucidated in more detail in a piece he wrote for World Policy here.

So this week a well known VC made the trek to my writing retreat in Marin, and we hung out in a room that until this year was a large storage closet behind my garage. I rethought the space, soundproofed it, added a hodge-podge of AV gear and musical instruments, and named the place the “Ross Social Club”  - on Foursquare, anyway. I haven’t really told anyone that I gave the place a name, but it was sort of an experiment – would anyone ever check in there besides me?

Now I chose that name for various reasons I won’t get into here (another story, one I’ll be glad to tell you over a bourbon). But I like being able to name a space on Foursquare, and it’s become a habit for me to “check in” whenever I actually use the room. It’s like  leaving a digital breadcrumb for me, a record of my new relationship to music (I’m learning to play the drums). A lot of friends hang out there too, often playing their own instruments or riffing on the whiteboards I’ve hung about the place. But  I don’t make it a habit to mention the room’s Foursquare doppelganger. It seems a bit … forced. And as far as I know, many of them don’t use the service.

On the same day I created the RSC on Foursquare (and probably because he asked me what I was doing on my phone), one fellow did check in. With some whimsy, he added a tip: “Try the wings.” It’d make you laugh if you’ve ever been there, trust me. Since then, in the past nine months, countless folks have been through the place, but only one other person has checked in.

Anyway, yesterday this well-known VC came by, and we met in the RSC mainly because it was too loud in my home office (construction going on outside). And as he walked in and sat, he put his iPhone down on a nearby table, as did I. I thought about asking him to check in, but….then I forgot. We spoke for an hour or so, reviewing all manner of things in our industry, discussed our business, and on his way he went.

Then I thought to myself – hey, he should have checked into that space. Then there’d be a record of his visit, and that’d be cool. Kind of like a guestbook of sorts.

But…I don’t even know if the fellow uses Foursquare. And he of course had no idea that the Ross Social Club was “lit up” on the service. And I wasn’t sure mentioning it to him wasn’t, well, kind of dorky.

You see all those social instrumentation and nuance problems I’m having?

Anyway, here’s a thought on one way to add just one wrinkle of nuance to location services. While I’m sure at some point in our collective future the concept of a “place” being digitally “alive” and communicable will be commonplace, at the moment, it’s rare and noteworthy.

As a transition between the two, I’d love a feature on Foursquare (or any other location service, er…say Google, or Facebook, or Twitter…) that allows me to send someone who I’ve been with somewhere (like the VC) an invitation to check in post facto. It’d kind of be like saying “Hey, send your phone over to my house. I’ll check you into the Ross Social Club.” The idea is, he didn’t know he could check in (and I forgot to tell him about it), but I can vouch for his presence there. He should get credit on Foursquare for being there (and the great Database of Intentions would get another bit of data), but he’s back in San Francisco now, so there’s no way for him to check in. But if he “sent his phone over” to me, I could do it for him.

Of course he wouldn’t actually send his phone over, the service would verify me as trustworthy and let me check the VC in on his behalf. But it’d add a rare human element to the service, and I for one would see many uses for it. If nothing else, it’d drive more interaction between people around the platform, and isn’t that what we all want anyway?

Just a random thought. OK, on with work…

As I work on the book, I’ve come to use a shorthand for five companies that I’ve determined are critical drivers of what kind of society we’ll be living in one generation from now. At the moment I’m focused on just Internet companies, though I also plan on looking at other categories, such as energy, food, and health.

My terminology has evolved in the past week from “the Five Horsemen” to simply “The Big Five.” I’ve got a few reasons for this. First, the Horsemen analogy is a bit negative (given it evokes the Four Horsemen of Apocalypse). Second, there’s a rather fun reference for the “big five” that has to do with personality traits (see this research, or this, for example). One goal of my book, which I should probably explain at a later date, is to tease out the essential character and philosophy – perhaps you could call it the personality – of each of these key Internet players. If corporations are people (in the US, anyway), I wonder what kind of people these companies might be?

I don’t think you’ll be surprised by my choice of the Big Five, but I do hope you’ll find my reasoning for their selection worthy. As you can see from the chart, the five are: Apple, Microsoft, Google, Amazon and Facebook.

If you’re wondering if these companies are in some kind of order, the answer is yes. They are in order of current market cap (Facebook is a private market cap, the company is rumored to soon to be public at a valuation that would place it ahead of Amazon). But there’s more to the selection of this Big Five than just market cap. In fact, there are four main criteria for making it into the Big Five.

First, as I began to describe above, the companies must have financial heft, both in terms of large equity capitalizations, significant cash on hand, and a defensible core profit making machine. This gives them the ability to throw their weight around: they can make strategic acquisitions (like Google’s acquisition of Motorola), and they can leverage their profit centers and cash positions in any number of ways that offer them flexibility to play the corporate game at the very highest levels.

Second, the companies must have scale in terms of direct reach to consumers. By this I mean their brands are used as meaningful platforms by hundreds of millions of people on a frequent basis.

Third, the companies must have deep engagement with those consumers, the kind of engagement that builds brand and creates massive stores of useful data. The relationship between the brand and its customer has to be meaningful and consistent (therefore creating permission to extract a premium and offer new products and services). It takes an ongoing service relationship for such engagement to occur – Microsoft with Xbox or Windows, for example, or Facebook with its core service. On the chart, I’ve ranked engagement and data on a scale of one to ten, based in part on my work on the Web 2 map earlier this year, and partly on my own experiences. (As with other parts of this chart, I ask for your help in codifying this metric, should you be so inclined.)

Fourth, the companies must have significant experience building platform operating systems that are defensible and supported by a vibrant developer community.

The Big Five play in each of these four categories, but there are significant differences between them all, as the chart illustrates. Let’s look at each in turn:

Apple has the strongest financial position of any of the Big Five, quite a feat when you consider the company was essentially bankrupt just 14 years ago. It’s one of the top three companies in the world by market cap, and has the largest cash position of any technology company, period. Its core profit driver is its device business, which may be under attack (from Android and others), but appears defensible. Through its Macintosh and iOS platforms, it reaches hundreds of millions of consumers on a daily basis, not to mention the millions who circulate through its retail stores and various software applications. Apple has a deeply engaged set of core users, but I’ve given the company a score of 6 because a lot of the engagement which occurs with Apple’s brand and products is indirect – I’m using a Macintosh to prepare this post, but I’m not directly engaged with Apple’s products as I do it. I’m using services that layer on top of them. I’d argue this is less true with iTunes, the iPad and the iPhone, and I’d wager that’s how Apple wants it – they want to deepen engagement with their customers, and iOS is how they are going about doing that. What data Apple collects is not easy to find  - but it certainly has to be deep. And Apple has long term and ongoing experience creating OS platforms, so I’ve scored the company highly there, though not as high as Microsoft, which has more reach.

Microsoft  is the second strongest of the Big Five in terms of financials. While it’s certainly not been a growth stock in the past decade or so, it’s a profit machine, and its revenues are massive. Windows and Office have been consistent defensible profit centers, allowing the company to pursue search, online publishing, and gaming, among other key businesses. For the same reasons as Apple, I’ve given Microsoft a middling engagement score – its massive Windows base is not very engaged at a brand level, but the twenty-odd million folks on the Xbox Live platform certainly are. As a data powerhouse, Microsoft is a wildcard – it has not leveraged the data created by our interactions with Windows and Office – at least not in ways I can divine. It does have tons of data around Xbox, Bing, and its move to the cloud should make it a key player here soon. And when it comes to experience creating and driving developer ecosystems in the OS space, Microsoft has the deepest experience of any of the Big Five. (And no, I am not going to get into arguments of whether those OSes are better or worse than one another – for now anyway).

Google ranks third in financial heft, but its reach across the web is unmatched by any of its cohorts in the Big Five. Its search business profit center is a monster, though the company faces threats from Bing on one side, and Facebook’s social web on the other. I’ve scored Google equal to Apple in engagement – it’s clearly far stronger as an engaged brand on the Internet, but less strong in its Android business, despite Android’s larger base. And of course, Google was built from the ground up as a data machine. As for experience in operating systems and developer ecosystems, Google is still in early stages. Android and Chrome are both relatively new and not fully baked.

Amazon has never been a major hoarder of cash, but the company has been on a roll of late, and is building both its reserves and its market cap. However, its profit center – ecommerce – is arguably not as defensible as others in the Big Five (though one could reasonably argue Amazon has locked in its consumers with extremely smart services such as its recommendation engine and Prime shipping programs). The company’s reach into consumers is smaller than any of its peers in the Big Five, and it has just begun to play its device engagement hand via the Kindle platform. Of course, nearly 150mm of us are already deeply hooked into Amazon’s commerce engine, and that’s a significant data advantage. As for operating system and developer experience, let’s not forget Amazon Web Services – the compute and storage layers of what might be called the web OS. Amazon has an enviable position in these critical areas of the emerging cloud ecosystem, though they are, in the main, indirect – for now. But those services must give Amazon a view into data that is the envy of its fellow Big Five companies.

Facebook is the youngest of the Big Five, and has pretty much no publicly available financial information. It’s fair to assume it’s the weakest of the Big Five financially, but that is set to change in the next year. It already boasts a massive valuation in the private markets, and once it goes public, it could have upwards of $10billion or more to play with. It has massive reach and deep engagement – nearly 1 billion of us use the service, half of us use it daily. Facebook’s data trove is enviable, and its moves into nearly every aspect of our lives – from payment to media, will create even more of it. The company also has created a huge base of developers for its platform, but the ecosystem is incomplete compared to vertically integrated OSes like iOS, Mac or Windows. Given its youth, I’d argue Facebook has the most to prove, but certainly has earned its place in the Big Five.

I’d love your input on the Big Five. I plan to use this post as a milestone of sorts, as I begin the journey of writing about their impact on our culture in the coming generation.

Jonathan Zittrain has an important op ed up on Harvard’s site, and I hope all of you will go read it. It sums up many of the points that I hit as I write here at Searchblog, and that will enliven my next book What We Hath Wrought. Key points:

Rising numbers of mobile, lightweight, cloud-centric devices don’t merely represent a change in form factor. Rather, we’re seeing an unprecedented shift of power from end users and software developers on the one hand, to operating system vendors on the other—and even those who keep their PCs are being swept along. This is a little for the better, and much for the worse…..

…in 2008, Apple announced a software development kit for the iPhone. Third-party developers would be welcome to write software for the phone, in just the way they’d done for years with Windows and Mac OS. With one epic exception: users could install software on a phone only if it was offered through Apple’s iPhone App Store. Developers were to be accredited by Apple, and then each individual app was to be vetted, at first under standards that could be inferred only through what made it through and what didn’t. For example, apps that emulated or even improved on Apple’s own apps weren’t allowed.

The original sin behind the Microsoft case was made much worse. The issue wasn’t whether it would be possible to buy an iPhone without Apple’s Safari browser. It was that no other browser would be permitted…

….Developers can’t duplicate functionality already on offer in the Store. They can’t license their work as Free Software, because those license terms conflict with Apple’s.

The content restrictions are unexplored territory. At the height of Windows’s market dominance, Microsoft had no role in determining what software would and wouldn’t run on its machines, much less whether the content inside that software was to be allowed to see the light of screen…

…tech companies are in the business of approving, one by one, the text, images, and sounds that we are permitted to find and experience on our most common portals to the networked world. Why would we possibly want this to be how the world of ideas works, and why would we think that merely having competing tech companies—each of which is empowered to censor—solves the problem?

This is especially troubling as governments have come to realize that this framework makes their own censorship vastly easier…

…A flowering of innovation and communication was ignited by the rise of the PC and the Web and their generative characteristics. Software was installed one machine at a time, a relationship among myriad software makers and users. Sites could appear anywhere on the Web, a relationship among myriad webmasters and surfers. Now activity is clumping around a handful of portals: two or three OS makers that are in a position to manage all apps (and content within them) in an ongoing way….

….If we allow ourselves to be lulled into satisfaction with walled gardens, we’ll miss out on innovations to which the gardeners object, and we’ll set ourselves up for censorship of code and content that was previously impossible. We need some angry nerds.

I’m not a nerd, quite, but I’m sure angry.

The Federal Trade Commission and Facebook have come to terms on consumer privacy, an issue the FTC formally raised in an eight-count complaint earlier this year. Both sides have announced the pact in their own particular way.

On Facebook’s blog, CEO Mark Zuckerberg strikes a diplomatic tone with a dash of mea culpa.

“Overall, I think we have a good history of providing transparency and control over who can see your information,” he writes. “That said, I’m the first to admit that we’ve made a bunch of mistakes. In particular, I think that a small number of high profile mistakes…have often overshadowed much of the good work we’ve done.”

Over at the FTC website, FTC Chair Jon Leibowitz and his press team are a bit more, well, strident. In reviewing the original complaint, the FTC nearly crows:

“The social networking service Facebook has agreed to settle Federal Trade Commission charges that it deceived consumers by telling them they could keep their information on Facebook private, and then repeatedly allowing it to be shared and made public.”

The release goes on to categorize the issues at hand in a pretty prosecutorial fashion:

“The FTC complaint lists a number of instances in which Facebook allegedly made promises that it did not keep:

• In December 2009, Facebook changed its website so certain information that users may have designated as private – such as their Friends List – was made public. They didn’t warn users that this change was coming, or get their approval in advance.
• Facebook represented that third-party apps that users’ installed would have access only to user information that they needed to operate. In fact, the apps could access nearly all of users’ personal data – data the apps didn’t need.
• Facebook told users they could restrict sharing of data to limited audiences – for example with “Friends Only.” In fact, selecting “Friends Only” did not prevent their information from being shared with third-party applications their friends used.
• Facebook had a “Verified Apps” program & claimed it certified the security of participating apps. It didn’t.
• Facebook promised users that it would not share their personal information with advertisers. It did.
• Facebook claimed that when users deactivated or deleted their accounts, their photos and videos would be inaccessible. But Facebook allowed access to the content, even after users had deactivated or deleted their accounts.
• Facebook claimed that it complied with the U.S.- EU Safe Harbor Framework that governs data transfer between the U.S. and the European Union. It didn’t.

The proposed settlement bars Facebook from making any further deceptive privacy claims, requires that the company get consumers’ approval before it changes the way it shares their data, and requires that it obtain periodic assessments of its privacy practices by independent, third-party auditors for the next 20 years.”

Zuckerberg makes the point that Facebook hasn’t exactly been sitting on its hands when it comes to these issues.

“For Facebook, this means we’re making a clear and formal long-term commitment to do the things we’ve always tried to do and planned to keep doing — giving you tools to control who can see your information and then making sure only those people you intend can see it….In the last 18 months alone, we’ve announced more than 20 new tools and resources designed to give you more control over your Facebook experience….

…privacy is so deeply embedded in all of the development we do that every day tens of thousands of servers worth of computational resources are consumed checking to make sure that on any webpage we serve, that you have access to see each of the sometimes hundreds or even thousands of individual pieces of information that come together to form a Facebook page. This includes everything from every post on a page to every tag in those posts to every mutual friend shown when you hover over a person’s name. We do privacy access checks literally tens of billions of times each day to ensure we’re enforcing that only the people you want see your content. These privacy principles are written very deeply into our code.”

I think this kind of back and forth between the institutions we entrust with our data – like Facebook – and those we entrust to oversee the common good – our government – is healthy and good for society. The bigger question, to my mind, is what kind of culture we are becoming as we decide to share all this information, regardless of whether we truly understand or even consider the implications of doing so.

The settlement will enter a period of public comment for the next month, then, presumably, it will be finalized.

A copy of the settlement can be found here.